{{articledata.title}}

- Arthur Hayes believes the four-year Bitcoin cycle no longer applies due to changing monetary policies

- Bitcoin's price surge is driven by expansive U.S. and Chinese monetary strategies

Bitcoin's famous four-year cycle is dead, says BitMEX co-founder Arthur Hayes. In a recent blog post, Hayes argued that the historical cycle, which many traders have relied on to predict Bitcoin (CRYPTO: $BTC ) market movements, is no longer valid. He argues that it is mostly because of changes in monetary policies that have altered the cycle, not because of the halving events or institutional influence that once characterized the cycle.

Historically, the bull and bear markets of Bitcoin have followed a predictable pattern, which aligns with the halving of this cryptocurrency. This four-year cycle has frequently been used to guide traders' expectations of when Bitcoin might experience price highs or lows. However, according to Hayes, the cycle is now irrelevant. "The four-year pattern worked in the past, but it will fail this time," Hayes wrote.

In the past, Bitcoin cycles usually concluded when contractionary monetary conditions inhibited growth. But the current market conditions are different. Global monetary policies, particularly those of the US and China, are having a greater influence on Bitcoin's price than its halving period can be predicted.

What's Driving the Current Cycle?

Hayes concludes that the present rally, unlike the cyclical restrictions, is the result of broad monetary conditions. The U.S. Treasury has been flooding markets with liquidity, and the Fed has resumed cutting interest rates despite inflation above target. Hayes also cited President Trump's attempts at keeping the economy "hot" by encouraging easy monetary policies.

Hayes concludes that the present rally, unlike the cyclical restrictions, is the result of broad monetary conditions. The U.S. Treasury has been flooding markets with liquidity, and the Fed has resumed cutting interest rates despite inflation above target. Hayes also cited President Trump's attempts to keep the economy "hot" via loose monetary policies.

The Role of Money Printing in Bitcoin's Surge

The historic price spikes of Bitcoin have been linked to global money printing. In past cycles, the price rallies were driven by the U.S. Federal Reserve quantitative easing programs and China's credit expansion. For instance, the first bull run of Bitcoin in 2013 coincided with the Fed's easing and a credit boom in China. The rally, however, was ended by the Fed and the People's Bank of China cutting back on their money printing.

The second cycle in 2015 was fueled by a Chinese credit boom, and the third cycle in 2020 was driven almost solely by U.S. liquidity into Bitcoin. Each cycle ended with the tightening of liquidity conditions. However, this time around is different, according to Hayes, because China is no longer deflationary, and the U.S. is still running its monetary machine.

Why the Four-Year Cycle Won't Work This Time

Hayes said that the past cycles were conditional on certain liquidity conditions. The current environment of continuing US and Chinese monetary policies is a totally different story. Bitcoin price is continuing to rise, supported by expectations of continued massive liquidity. "Money shall be cheaper and more plentiful," Hayes said, predicting that Bitcoin will keep climbing as these conditions persist.

While the four-year cycle has come to an end, some think that the price action of Bitcoin still reflects past trends. Onchain analytics firm Glassnode highlighted that Bitcoin's price movements still have a resemblance to past cycles, but Hayes remains skeptical that this will remain true.

Bitcoin is trading at just above its all-time high, which was $122,000. However, with the market looking to take profits, open interest on Binance fell by almost 8% after it reached record highs, causing some traders to feel cautious.