Arthur Hayes: Bitcoin Price Driven by Global Liquidity, Not Cycles
BitMEX co-founder Arthur Hayes argues that Bitcoin's traditional four-year market cycle, linked to halving events, is outdated. Instead, current price movements are driven by global liquidity conditions, particularly monetary policies in the US and China.
- Bitcoin's price aligns with liquidity expansion and contraction, not a fixed halving schedule.
- The US Treasury has injected $2.5 trillion into markets, supporting growth and reducing debt burdens.
- The Federal Reserve is moving towards rate cuts, keeping liquidity abundant, which supports Bitcoin's uptrend.
Liquidity as the Key Market Driver
- Historically, Bitcoin rallies coincided with periods of global monetary expansion.
- Current market conditions are favorable due to easier financial conditions in both Washington and Beijing.
Market Outlook
- Bitcoin trades around $122,000, slightly below its recent all-time high of $126,000.
- BlackRock’s iShares Bitcoin Trust (IBIT) recorded $899 million in inflows on October 7.
- Bitcoin spot ETFs saw a net inflow of $441 million, marking eight consecutive days of inflows.
- Ethereum spot ETFs also recorded a net inflow of $69.05 million over the same period.
CryptoQuant data shows an 8% drop in open interest on Binance after reaching a record $15.07 billion, indicating traders are taking profits and reducing leverage.