Macro Liquidity, Not Halving, Drives Bitcoin's Future: Hayes

The Shifting Paradigms of Bitcoin Valuation: Beyond the Halving Cycle

Arthur Hayes, the insightful co-founder of BitMEX, presents a compelling re-evaluation of Bitcoin's price dynamics, asserting that the long-revered four-year halving cycle has become an obsolete indicator. In his recent essay, "Long Live the King!", published on October 9, 2025, Hayes posits that global macro liquidity, rather than the intrinsic protocol mechanics of Bitcoin's halving events, now dictates the cryptocurrency's market trajectory. This perspective challenges conventional wisdom, suggesting that the prevailing policy decisions emanating from financial powerhouses like Washington and Beijing are fostering an environment of structurally easier money, which is poised to propel Bitcoin's value higher, even as many market participants anticipate a traditional cycle peak based on past patterns. Hayes critically notes that while the four-year mark of Bitcoin's fourth halving cycle is imminent, those adhering to the established cycle models may overlook crucial shifts that render them ineffective in the current economic climate.

Deciphering Bitcoin's True Drivers: Macro Liquidity Takes Center Stage

At the core of Hayes's analytical framework lies the conviction that the cost and availability of money are the paramount variables influencing risk assets. He argues that Bitcoin, despite its perceived status as a superior form of money in contemporary civilization, remains intrinsically tied to the ebb and flow of dollar liquidity. This connection means its dollar valuation will inherently fluctuate in response to the price and supply of the U.S. dollar. Furthermore, Hayes extends his analysis to incorporate China's economic influence, suggesting that the yuan credit impulse has historically played a significant role in either amplifying or dampening crypto market cycles, operating in conjunction with prevailing U.S. financial conditions. This comprehensive view underscores a departure from a purely internal Bitcoin-centric analysis to one that embraces the broader, interconnected global financial landscape.

Historical Cycles Reimagined: A Monetary Lens

To substantiate his claim that halving-anchored timing mechanisms are no longer valid, Hayes meticulously reviews four distinct eras in Bitcoin's history, each linked to pivotal shifts in both dollar and yuan liquidity. These historical accounts serve to illustrate how external monetary conditions, rather than just supply-side adjustments from halvings, have consistently shaped Bitcoin’s performance.

• The Genesis Cycle (2009–2013): This initial phase was characterized by the extensive quantitative easing policies enacted in the aftermath of the Global Financial Crisis (GFC) and a concurrent surge in Chinese credit. Hayes points out that the deceleration of both these liquidity drivers into 2013 directly contributed to the "popping of the Bitcoin bubble" at that time.
• The ICO Cycle (2013–2017): This period, often associated with the rise of Initial Coin Offerings, was, according to Hayes, less driven by dollar flows and more by substantial amounts of yuan circulating in global money markets. A significant spike in China's credit impulse in 2015, coupled with a yuan devaluation, provided the impetus for this cycle. However, subsequent tightening of monetary policy and rising U.S. interest rates ultimately brought an end to this upward trajectory.
• The COVID Hoax Period (2017–2021): Hayes’s provocative label for the pandemic-era policy response highlights the unprecedented scale of "helicopter money" under the Trump administration. This period saw a rapid doubling of the dollar supply alongside interest rates pegged at zero, which acted as a powerful propellant for all risk assets, including cryptocurrencies. The cycle's conclusion was marked by inflation concerns that necessitated monetary tightening in late 2021.

The New World Order: Political Choices and Enduring Liquidity

In the ongoing "New World Order" phase (2021–present), Hayes argues emphatically that Bitcoin's remarkable resilience and continued ascent are attributable to the intricate plumbing of global liquidity, rather than the scheduled halving events. He draws particular attention to the U.S. Treasury's strategic issuance of short-dated bills. This tactical shift effectively drained the Federal Reserve’s reverse repo facility, injecting approximately $2.5 trillion of liquidity back into the markets. Hayes frames this as a deliberate political decision to maintain a "hot" economy, signaling a clear intention to prioritize economic growth and stability through accessible capital.

Unambiguous Policy Signals from Washington and Beijing

Hayes directly correlates this macro pivot with the current market setup. He observes that the Federal Reserve resumed cutting interest rates in September, despite inflation remaining above its target threshold, indicating a bias towards accommodative monetary policy. Concurrently, the administration is actively pursuing initiatives to "lower the cost of housing" and ease banking regulations to stimulate lending towards "critical industries." From Hayes's perspective, these collective policy signals are unequivocally pointing towards a future where "money shall be cheaper and more plentiful."

Turning to China, Hayes foresees a different, yet equally supportive, dynamic. While he does not anticipate a return to the extreme credit surges witnessed in 2009 or 2015, he also believes China will not act as a deterrent to global liquidity. Despite facing deflationary pressures and significant challenges within its property sector, Hayes expects pragmatism to guide Beijing's economic strategy. His prediction is clear: "When the economic pressure proves too intense… Chinese policymakers print money." This implies that while China may not be the primary engine of global fiat creation in this cycle, its policies will certainly not impede it. The overarching thesis thus asserts that all market cycles, including Bitcoin's, are fundamentally monetary cycles, merely manifesting through different market masks. Bitcoin’s earlier peaks aligned with diminishing dollar and yuan liquidity, while its current upward momentum reflects a novel convergence of political priorities favoring easier money, irrespective of the halving schedule.

In a candid summation, Hayes advises market participants to "Listen to our monetary masters in Washington and Beijing. They clearly state that money shall be cheaper and more plentiful. Therefore, Bitcoin continues to rise in anticipation of this highly probable future." His concluding metaphor, "The king is dead, long live the king!", eloquently encapsulates his argument: the old drivers are gone, but a new, more powerful force now reigns. At the time of this analysis, Bitcoin was trading at $122,147, reflecting the ongoing market dynamics influenced by these macro factors.