Arthur Hayes expects local crypto top in Q1 2025 due to increased U.S. dollar liquidity

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer at Maelstrom, shared a bullish view on the cryptocurrency market for Q1 2025 in his recent Substack blog post. He links his optimism to an expected increase in dollar liquidity, driven by the U.S. Federal Reserve's quantitative tightening (QT) policy and reduction of the Reverse Repo Facility (RRP) balance as well as the Treasury's spending from its Treasury General Account (TGA). Hayes predicts that a decrease in the Reverse Repo Facility (RRP) balance and Treasury expenditures could inject $612 billion into the economy in the first quarter, potentially boosting the crypto market. Hayes anticipates a local crypto market peak at the end of Q1 2025, mirroring patterns from 2024, but warns of a potential downturn starting in mid-April due to tax deadlines. He also notes that external factors like China's credit policies, the Bank of Japan's rate decisions and potential U.S. dollar devaluation could influence market trends.