KeyTakeaways
- Arthur Hayes projects a Q1 bitcoin peak driven by a $612 billion liquidity injection, combining the influence of the Federal Reserve and the Treasury.
- Hayes looks at DeSci’s opportunities, positioning investments ahead of the predicted peak of the cycle.
Arthur Hayes, former CEO of BitMEKS and current CIO of Maelstrom, predicts that Bitcoin will reach a local peak by the end of Q1 2025, fueled by significant injections of liquidity from US financial institutions.
In a new blog post released Monday evening, Hayes explained that this outlook has its roots in the expected injections of liquidity from key US financial entities, including the Federal Reserve and the Treasury Department.
Hayes’ analysis suggests that these liquidity changes will act as a significant tailwind for Bitcoin’s growth.
They could help mitigate potential disappointments stemming from the delayed implementation of pro-crypto policies under the Trump administration.
Hayes highlights two key sources of liquidity driving markets in the first quarter of 2025.
Adjustments to the Reverse Repo Facility (RRP) shifted $237 billion into higher-yielding Treasuries, while the drawdown of the Treasury General Account (TGA) under Janet Yellen is expected to add $375 billion through March.
Combined, this creates a $612 billion increase in liquidity, boosting Bitcoin and other risk assets.
“March seems to be the time when the market is going to ask, ‘What’s next?'” Hayes said, suggesting that the TGA balance sheet will be nearly depleted by then, marking the peak of the impact on liquidity.
Based on historical patterns, Hayes predicts a local peak for Bitcoin in March 2025, coinciding with peak liquidity.
While optimistic about bitcoin’s near-term prospects, Hayes remains cautious about macroeconomic uncertainties, including changes in Federal Reserve policy.
Convinced of the predictive power of RRP and TGA changes, he is steering Maelstrom’s strategy towards high-risk opportunities such as decentralized science (DeSci) tokens, capitalizing on the favorable liquidity environment.
Hayes revealed that Maelstrom has already started building its portfolio in the decentralized science (DeSci) sector, targeting what he calls “undervalued crap” tokens.
The fund has acquired a number of assets including $BIO, $VITA, $ATH, $GROV, $PSI, $CRIO and $NEURON.
