Arthur Hayes foresees a strong start for crypto in 2025, fueled by dollar liquidity and predicts crypto market peak in March.
Arthur Hayes, former CEO of BitMEX and now Chief Investment Officer at investment fund Maelstrom, has revised his outlook for the cryptocurrency market, projecting a bullish first quarter for 2025. Hayes, who previously warned of a potential market correction around Donald Trump’s inauguration, now believes sufficient dollar liquidity will fuel a continued “Trump pump” rally until mid to late March.
In his latest blog post, Hayes attributed his change in perspective to the liquidity dynamics in the US economy. “I still believe that is a potential negative factor that could weigh upon the market in the short term, but against that, I must balance the dollar liquidity impulse,” he noted.
Trump, who will assume office in two weeks, is seen as a crypto-friendly figure. Key industry shifts, such as the replacement of SEC Chair Gary Gensler with pro-crypto advocate Paul Atkins, have bolstered optimism among investors. Market participants also hope Congress will pass pivotal legislation, including stablecoin regulations and frameworks enabling banks to custody cryptocurrencies directly.
Bitcoin Recovery and Dollar Liquidity Dynamics
Hayes stated that Bitcoin BTC $109 985 24h volatility: 0.1% Market cap: $2.19 T Vol. 24h: $33.89 B might have experienced a “Trump dump” from mid-December to year-end 2024. Notably, during this period, BTC price slipped from a high of $108,268 on December 17 to as low as $92,000. However, the market regained momentum recently, with Bitcoin climbing 5.5% in value during the first week of the year. Its market capitalization surged over 10% to reach $2 trillion.
Hayes anticipates an influx of $237 billion in liquidity during Q1, stemming from the Federal Reserve’s declining Reverse Repo Facility (RRP) and the U.S. Treasury’s spending of its general account to address the debt ceiling. He estimates total liquidity could reach $612 billion by the end of March, providing a favorable backdrop for the crypto market.
Despite these positive factors, Hayes warned of potential headwinds later in the year, such as debt ceiling negotiations and tax payment deadlines in April. He also highlighted external risks, including monetary policy adjustments by the Bank of Japan and yuan credit creation rate by China.
Hayes revealed that Maelstrom has moved toward decentralized science (DeSci) tokens, an emerging sector leveraging blockchain to facilitate scientific research. The family office recently acquired tokens such as BIO, VITA, and NEURON, according to the CIO.
Hayes’ call for “degen” investments reflects the sector’s evolving dynamics. Several crypto experts have predicted Bitcoin price to reach between $150,000 and $250,000 in 2025. The largest cryptocurrency is currently trading at around $100,739 with a 50% surge in its 24-hour trading volume.
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