Arthur Hayes: Bitcoin’s 4-Year Cycle Is Dead, Long Live Liquidity

The widely used “4-year cycle” theory, which has long explained the ebb and flow of the crypto market, may no longer be valid.

In a recent blog post, Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, argued that the 4-year cycle will not work in this bull run. He believes this is because the conditions are fundamentally different.

US and China’s Monetary Policy Matters

Hayes believes that Bitcoin’s price is now dictated by changes in the global money supply, not by halvings or market maturation. He said Bitcoin’s price will decline only when major countries begin monetary tightening, not on a four-year timeline.

Hayes argues that the leading countries to watch are the US and China. In his view, Bitcoin’s price has always been heavily influenced by the liquidity of the US dollar and the Chinese yuan.

• 2009-2013: Following the 2008 financial crisis, the US and China both initiated massive liquidity injections. The US began unlimited quantitative easing, while China expanded credit-based infrastructure spending. By 2013, these expansionary policies burdened both the Fed and the People’s Bank of China.
• 2013-2017: The second cycle was fueled by a surge in Chinese yuan liquidity. The emergence of Ethereum and the ICO boom allowed cryptocurrencies to benefit directly from this liquidity injection.
• 2017-2021: The third cycle, which coincided with the COVID-19 pandemic, was driven by US liquidity. The US government implemented the most significant government subsidies since the New Deal in the 1930s. At the time, China was pursuing an anti-crypto policy, which did not significantly impact the price rally. This cycle, too, ended with the Fed’s tightening policy in late 2021.

The New Driver: Populism

Hayes identifies political populism as the key feature of the fourth and current cycles. He argues that both President Joe Biden and President Donald Trump have approached the issue of rising asset prices with the same solution: printing more money.

Trump recently advocated for lowering the US federal funds rate to 1% and reducing home mortgage rates to unlock trillions of dollars in home equity.

Arthur Hayes also noted that Chinese President Xi Jinping wants to escape the current state of severe deflation. He says China tends to print money when economic pressure becomes too severe. He predicts that even if China does not actively pursue monetary easing, it will at least not hinder the US from doing so.

Will Bitcoin’s Price Fall in 2026?

According to the “4-year cycle,” Bitcoin’s price should begin to decline at the end of 2025. However, Hayes argues that such a forecast is difficult to make in the current liquidity environment, so he believes the 4-year cycle will not work this time.

Arthur Hayes isn’t alone in this view. Other crypto experts are echoing similar sentiments. Bitwise CIO Matthew Hougan recently said that the 4-year cycle is over. He added that the theory can officially rest if Bitcoin’s price remains positive through 2026.

K33 Research, a crypto analysis firm, said that Bitcoin has entered a phase where its price is determined by structural forces, not by a small number of retail investors. Vetle Lunde, Head of Research at K33, said that if Grayscale adds staking to its Ethereum product, it could increase interest in the ETF.

He also noted that a post-shutdown market could increase interest in altcoins. This suggests that Bitcoin’s price will likely sustain itself or rise rather than fall.