Hayes Predicts Market Peak in Mid-March, Followed by Correction

Arthur Hayes predicts the cryptocurrency market will peak by mid-March 2025, driven by US liquidity conditions, before experiencing a correction. His forecast is based on factors like the Federal Reserve’s Reverse Repo Facility and the US Treasury’s actions.

Arthur Hayes, former CEO of BitMEX, predicts a peak in the cryptocurrency market by mid-March 2025, followed by a major correction. He bases this forecast on US dollar liquidity dynamics and its influence on global markets, especially crypto.

Hayes highlights two key factors—the Federal Reserve’s Reverse Repo Facility (RRP) and the US Treasury’s General Account (TGA)—which influence liquidity and Bitcoin’s price. Since Bitcoin's bottom in Q3 2022, its price has mirrored the decline in RRP, reflecting increased market liquidity. Hayes believes that while there may be delays in pro-crypto policies under Trump’s administration, the liquidity environment remains favorable.

Despite the Fed’s quantitative tightening (QT), Hayes expects a $237 billion liquidity injection from the RRP adjustment to offset QT’s impact, creating a net positive liquidity of $57 billion.

The Treasury’s Role and Market Outlook

Hayes also notes the Treasury’s strategy to address the debt ceiling could temporarily boost liquidity, aligning with his prediction for a market peak in March 2025. He anticipates the TGA could be 76% depleted by that time.

Hayes cautions that other factors, such as changes in China’s credit policies and actions from the Bank of Japan, could influence crypto prices. He remains optimistic for the short-term but advises caution, recommending selling by the end of Q1 2025 before a potential correction.

Hayes plans to increase risk exposure through investments in decentralized science (DeSci) projects. His fund, Maelstrom, has invested in several emerging tokens, reflecting his belief in their transformative potential.