BitMEX founder Arthur Hayes in his latest
article used the metaphor of a ski resort in Hokkaido, comparing the US dollar liquidity to snow, and "the disappointment that may come from the high expectations of Trump's policies" to the bamboo leaves (sasa) hidden under the snow, to predict the future trend of the global investment market, including Bit.
Trump's Policies Difficult to Implement
Arthur Hayes pointed out that the market has high expectations for the Trump administration, especially its pro-business and pro-crypto policy positions. Investors generally expect that after taking office, Trump will quickly push through policies, including relaxing crypto regulation, reducing tax burdens, and supporting US economic growth.
However, Arthur Hayes believes that the implementation speed and actual effects of these policies may be far lower than the market's high expectations, and the gap between expectations and reality may have a negative impact on market sentiment, leading to a market correction. In this context, whether the US dollar liquidity can cover the market disappointment caused by the slow implementation and effect of Trump's policies will be a major factor affecting the trend in the first quarter of 2025.
US Dollar Liquidity Can Compensate
Arthur Hayes said that after a comprehensive assessment of the Federal Reserve's liquidity policy and the US Treasury's liquidity policy, the first quarter is expected to release $612 billion in liquidity, which will provide significant liquidity support for the Altcoin market, and Bit is expected to usher in a strong upward trend.
When Will the Market Peak
In summary, the liquidity environment in the first quarter is favorable. Arthur Hayes suggests that investors should increase their allocation to Altcoins and risky assets, and further points out that his family office fund Maelstrom is optimistic about and has allocated investments in the "Decentralized Science (DeSci) track", such as BIO, VITA, ATH, GROW, PSY, CRYO, and NEURON.
However, after the market enters the second quarter, the market may peak and face adjustment risks. Therefore, after March 2025, Arthur Hayes recommends that investors gradually reduce their risk exposure and wait for the liquidity to improve again in the third quarter.
CryptoQuant Analyst Issues Similar Warning
On the other hand, CryptoQuant analyst Crypto Dan also stated in his
article on January 6th that the Bull market may reach a cyclical peak in the first quarter or at the latest in the second quarter of 2025. Crypto Dan pointed out that based on historical patterns, the market may have entered the late stage of the Bull market.
Crypto Dan cited the UTXO realized market value indicator, which shows that Bit transactions in the past month accounted for 36% of the total market value. Although this value is lower than the historical Bull market peak (usually reaching 50%-60% at the most severe market bubble), the long-term trend shows that this proportion has been continuously declining.
In past Bull markets, this indicator (short-term trading ratio) usually rises sharply 2-4 times before the market peak, forming the so-called "market overheating" warning, and this warning has already begun to emerge.
Therefore, although the expectation of a substantial rise in Bit and Altcoins is still worth looking forward to, from a conservative perspective and considering risk management, it is still recommended to proceed with caution.
