Former BitMEX CEO Arthur Hayes predicts that the cryptocurrency market will reach its peak in mid-March 2025, followed by a significant correction. Hayes bases his forecast on the U.S. dollar liquidity environment and recent policy changes from the Federal Reserve and the Treasury Department.
Hayes anticipates that the Federal Reserve's quantitative tightening policy, which reduces its balance sheet by $60 billion per month, will remove $180 billion in liquidity from the market by March. However, he also expects the U.S. Treasury to inject liquidity by spending down its General Treasury Account (TGA), providing a temporary boost to the market.
Despite the short-term bullish signal, Hayes warns that the crypto market will face a severe correction after the first quarter of 2025 due to tightening liquidity conditions and the upcoming tax season in April. Investors are advised to stay cautious and consider the potential risks associated with the market's volatility.
