tl;dr
BitMEX co-founder Arthur Hayes claims the long-standing 'four-year crypto cycle' is obsolete, arguing Bitcoin's price movements now depend on U.S. and Chinese monetary policies rather than halving events or institutional hype.
**Arthur Hayes: The Four-Year Crypto Cycle is Dead—Here’s Why**
BitMEX co-founder Arthur Hayes has declared that the long-standing “four-year crypto cycle” is no longer relevant, challenging a widely held belief among traders and investors. In a recent blog post, Hayes argued that Bitcoin’s price movements are no longer dictated by arbitrary four-year patterns tied to halving events or institutional interest, but rather by broader monetary dynamics involving U.S. and Chinese liquidity.
### The Decline of the Four-Year Cycle
Hayes acknowledged that traders often look to historical cycles to predict market turning points, particularly as the fourth cycle approaches its anniversary. However, he emphasized that this pattern “will fail this time.” Historically, Bitcoin’s bull runs ended when monetary conditions tightened, not because of timing or external factors like halving events. “The four-year pattern worked in the past, but it’s no longer applicable,” Hayes wrote.
### Why This Cycle Is Different
Hayes highlighted several factors that distinguish the current cycle from previous ones:
1. **U.S. Monetary Policy Shifts**: The U.S. Treasury has drained $2.5 trillion from the Federal Reserve’s Reverse Repo program, injecting liquidity into markets through Treasury bills. Meanwhile, President Donald Trump’s push for “easier monetary policy” and plans to deregulate banks to boost lending have created a more accommodative environment.
2. **Rate Cuts Amid Inflation**: Despite inflation exceeding the Fed’s target, rate cuts are expected this year, with 94% odds of a cut in October and 80% in December, according to CME futures.
3. **Chinese Policy Shifts**: While China previously fueled Bitcoin cycles through credit expansion, Hayes noted that Beijing is now focused on “ending deflation” rather than draining liquidity. This shift removes a key headwind for Bitcoin, allowing U.S. monetary expansion to drive prices without Chinese deflationary pressures.
### The Role of USD and Yuan in Bitcoin’s Journey
Hayes traced Bitcoin’s historical cycles to the interplay between U.S. and Chinese monetary policies:
- **2013 Bull Run**: Coincided with U.S. quantitative easing and Chinese credit growth, ending as both nations tightened liquidity.
- **2015 ICO Cycle**: Driven by Chinese yuan expansion, not U.S. dollars. The crash followed China’s credit slowdown and tighter U.S. conditions.
- **2020–2021 COVID Cycle**: Bitcoin surged on U.S. liquidity, while China remained restrained. The cycle ended with Fed tightening in late 2021.
This time, Hayes argues, China’s role is diminished, and U.S. policy is the primary driver. “Money shall be cheaper and more plentiful,” he wrote, concluding, “The king is dead, long live the king!”
### Contrasting Views: The Four-Year Cycle Lives On
Despite Hayes’ assertions, some industry players still see value in the four-year cycle. Onchain analytics firm Glassnode noted in August that Bitcoin’s price action “echoes prior patterns.” Similarly, Saad Ahmed, head of APAC at crypto exchange Gemini, told *Cointelegraph* that “it’s very likely we’ll continue to see some form of a cycle.”
### The Debate Continues
Hayes’ analysis underscores a broader shift in how Bitcoin’s price is understood. While traditional cycles may still hold some relevance, the focus is increasingly on macroeconomic forces—particularly the interplay between U.S. and Chinese monetary policies. As central banks navigate inflation, debt, and regulatory changes, the crypto market remains a barometer for global liquidity trends.
For now, the debate between cyclical patterns and monetary fundamentals shows no signs of resolution. But one thing is clear: the forces shaping Bitcoin’s future are as complex as they are dynamic.