The crypto world often feels like a clockwork mechanism, especially when it comes to Bitcoin’s price movements. For years, we’ve watched the four-year halving cycle with a certain reverence, almost as if it were a cosmic law. But what if that clockwork is broken? What if the gears grinding away are not the ones we thought?
- Arthur Hayes argues that Bitcoin’s traditional four-year price cycle, linked to mining reward halvings, is no longer the primary driver of its movements. He suggests that global monetary conditions have become the dominant force.
- Hayes posits that past bear markets coincided with monetary tightening by central banks, implying that the environment of fiat money supply and liquidity is more influential than halving events alone.
- He anticipates an “impending fiat liquidity deluge” due to accommodative monetary policies from major economies like the U.S., Japan, and China, which he believes will sustain Bitcoin’s bull market.
Arthur Hayes, the chief investment officer and co-founder of Maelstrom, recently threw a wrench into this widely held belief. In his essay, “Long Live the King!”, Hayes argues that the traditional four-year cycle, tied to Bitcoin’s mining reward halvings, is effectively dead. He suggests a different, more powerful force is at play: global monetary conditions.
The Fading Echo of the Halving Cycle
For those new to the game, or just needing a refresher, the Bitcoin halving is a programmed event. Roughly every four years, the reward miners receive for adding a new block to the blockchain gets cut in half. This reduces the rate at which new Bitcoin enters circulation.
Historically, this event has been a major talking point. It usually kicks off a bull run, a period of rising prices, leading up to and following the halving itself. Then, about 16 to 18 months later, an intense bear market often takes hold. We saw this pattern play out after the halvings in 2012, 2016, and 2020.
The most recent halving happened in April 2024. So, if you were following the old playbook, you might be bracing for a peak soon, perhaps followed by a year-long downturn. It’s a natural concern, given how consistently this cycle seemed to repeat itself.
But Hayes looks at the past bear markets of 2014, 2018, and 2022 and sees something else entirely. He points out that these sharp price plunges, where Bitcoin lost 70% to 80% of its value from its peak, coincided with monetary tightening in major economies. Think of central banks pulling back on easy money policies, making borrowing more expensive.
It’s a subtle but important distinction. Was it the halving itself that triggered the downturn, or was it the broader financial environment? CoinDesk made a similar observation in 2023, suggesting that Bitcoin’s four-year rhythm might be more connected to the ebb and flow of fiat money supply and liquidity, rather than just the halving events alone.
Hayes is quite direct about it. He believes that with the four-year anniversary of this current cycle upon us, traders are mistakenly applying an outdated pattern. He sees an “impending fiat liquidity deluge” on the horizon, a flood of easy money, that will keep the bull market charging forward.
A New Monetary Tide
So, what makes this time different, according to Hayes? It boils down to a shift in global monetary policy. He expects conditions to remain accommodative, meaning central banks are likely to keep money cheap and plentiful. This, in turn, should accelerate money supply growth, rather than contract it.
Let’s look at the players. The U.S. government and its central bank, the Federal Reserve, are already moving into an easing stance. This means policies designed to stimulate the economy, often by making money more accessible.
President Trump, for example, has been vocal about his desire to “run the economy hot.” He often speaks about growing the American economy to reduce its debt load. He also talks about lowering housing costs. This would release trillions of dollars of trapped home equity, a consequence of rapidly rising housing prices since 2008.
The Federal Reserve has already acted. They cut interest rates by 25 basis points (a quarter of a percentage point) to around 4% in September 2025. And more cuts are expected. Hayes points to further reductions totaling up to 100 basis points (a full percentage point) over the next 12 months. This clearly signals a more accommodative approach to money.
It’s not just the U.S. Japan could soon follow suit. Hayes notes that the new Prime Minister is a strong believer in the ultra-stimulatory Abenomics strategy. This approach involves aggressive monetary easing, fiscal stimulus, and structural reforms to boost the economy.
Even China, while perhaps not as aggressively stimulatory as in previous Bitcoin bull runs, is focused on ending deflation. This means Beijing is unlikely to drain fiat liquidity from the system. Such a stance would support continued price gains for Bitcoin, rather than hindering them.
Hayes sums up this global outlook with a clear directive. “Listen to our monetary masters in Washington and Beijing,” he advises. “They clearly state that money shall be cheaper and more plentiful. Therefore, Bitcoin continues to rise in anticipation of this highly probable future.”
It’s a powerful argument, suggesting that the true puppet masters of Bitcoin’s cycles might not be the code itself, but the decisions made in central banks and government offices around the world. It makes you wonder, doesn’t it, if we’ve been watching the wrong scoreboard all this time?
