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BitMEX co-founder and Maelstrom chief funding officer Arthur Hayes predicted that markets would probably peak by mid-to-late March 2025, pushed by an inflow of greenback liquidity regardless of political and coverage uncertainties.
Hayes pointed to a internet injection of $57 billion in liquidity by way of the primary quarter, pushed by shifts in Federal Reserve and US Treasury insurance policies.
Debt ceiling and Treasury technique
In his newest weblog publish, Hayes argued that whereas expectations for pro-crypto insurance policies from President-elect Donald Trump might result in market disappointment, the liquidity enhance from a dwindling Reverse Repo Facility (RRP) and Treasury Basic Account (TGA) spending would help danger belongings, together with Bitcoin (BTC).
Based on Hayes:
“The sasa of a letdown by group Trump on his proposed pro-crypto and pro-business laws will be lined by a particularly constructive greenback liquidity atmosphere.”
Hayes famous that Bitcoin’s rise has been “intently tied to the depletion of the RRP,” and there’s a direct correlation between lowered RRP balances and market rallies in crypto and tech shares.
He additional defined that because the RRP nears depletion, $237 billion will move into the markets, offsetting $180 billion in liquidity reductions from the Fed’s ongoing quantitative tightening.
Hayes forecasted that the Treasury’s reliance on its TGA amid debt ceiling delays would maintain market momentum till March. With the TGA standing at $722 billion, Hayes expects spending to speed up because the account depletes by 76%, probably triggering market hypothesis forward of a decision to lift the debt ceiling.
Whereas Hayes acknowledged that delays in Trump’s legislative agenda might dampen enthusiasm, he maintained that liquidity situations would offer sufficient help to propel Bitcoin and equities greater within the quick time period.
April correction
Regardless of his optimism, Hayes acknowledged dangers tied to international financial variables, together with China’s credit score insurance policies and potential shifts by the Financial institution of Japan. He additionally flagged April 15, the US tax cost deadline, as a key turning level, predicting a brief downturn in crypto markets.
Drawing parallels to Bitcoin’s mid-March peak in 2024, Hayes instructed an identical trajectory might unfold, with sideways buying and selling or declines following the liquidity surge. He stated:
“Proper on schedule, identical to nearly each different 12 months, it is going to be time to promote within the late phases of the primary quarter and chill on the seaside, on the clerb, or on a ski resort within the southern hemisphere and anticipate constructive fiat liquidity situations to re-emerge within the third quarter.”
Hayes concluded by signaling that Maelstrom would improve its publicity to danger belongings, together with decentralized science tokens, as a part of its first-quarter technique.