The post Arthur Hayes Predicts Crypto Peak in March 2025 Amid $612B Liquidity Surge appeared on BitcoinEthereumNews.com.

BitMEX co-founder Arthur Hayes predicts crypto markets will peak in March 2025 before facing a major correction, based on his detailed analysis of US dollar liquidity patterns. In his latest article, Hayes examines how Federal Reserve policies and Treasury Department operations will inject around $612 billion of liquidity into markets during Q1 2025, creating conditions for a strong rally before a potential downturn. The market forecast centers on two key components. First, the Federal Reserve’s Reverse Repo Facility (RRP) will likely drop from $237 billion to near zero as money market funds seek higher yields in Treasury bills. Second, the US Treasury will spend down its Treasury General Account (TGA) by about $722 billion due to debt ceiling constraints. Combined, these actions will flood markets with dollar liquidity through March. Federal Reserve policy and market impact Arthur Hayes focuses on two key Federal Reserve mechanisms affecting market liquidity. The first involves changes to the Reverse Repo Facility (RRP), which will release about $237 billion into markets as it approaches zero. This shift occurs because money market funds will withdraw their funds to purchase Treasury bills offering yields above 4.25%, exceeding the RRP’s rate after December’s policy adjustment. – Advertisement – The second factor comes from the Fed’s ongoing quantitative tightening (QT) program, removing $60 billion monthly from markets. Over Q1 2025, this equals $180 billion in reduced liquidity. However, Hayes calculates that when combined with the RRP changes, the net result remains positive – adding $57 billion to market liquidity during this period. Hayes draws direct connections between these liquidity flows and crypto prices, pointing to historical patterns. He references how Bitcoin bottomed in Q3 2022 when the RRP peaked, then rose as the facility’s balance declined. This pattern reinforces his view that dollar liquidity drives crypto market movements more…

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Filed under: News - @ January 8, 2025 1:30 pm