Bold prediction for Bitcoin in 2025: the market peaked in mid-March, and April may usher in a 'funding winter'!
Are you ready to seize this rebound wave, or will you be drowned by the pullback? The latest predictions from BitMEX's former CEO Arthur Hayes will reveal the key points and strategies for the market.
⏳ Why is March 2025 a critical time point?
💡 Core Reason: Liquidity
Arthur Hayes' analysis closely links the crypto market trends with the **Fed's quantitative tightening (QT)**. Here is the key logic:
The Fed reduces liquidity by $60 billion each month
From 2023 to now, quantitative tightening has significantly reduced market liquidity supply. It is predicted that by mid-March 2025, this policy will withdraw $180 billion in liquidity, and the market may peak as liquidity gradually exhausts.
Historical Review: The liquidity crisis of 2022
That year, the Fed's reverse repurchase tool (RRP) absorbed $2 trillion in liquidity, leading to a sharp decline in the crypto market and tech stocks. History may repeat itself in 2025.
📊 Data as proof:
The impact of liquidity exhaustion has been repeatedly validated, especially in the high-leverage environment of the crypto market, where this effect is more pronounced.
📈 Opportunities in the first quarter: short-term bullish signals
Although Hayes maintains a cautious stance for the second quarter of 2025, there are still upward opportunities from January to March for the following reasons:
1. TGA (Treasury General Account) releases liquidity 💵
The U.S. Treasury is expected to reduce funds in the TGA, which means more liquidity will be injected into the market, directly benefiting risk assets, including Bitcoin.
2. RRP (Reverse Repurchase Agreement) balance declines 📉
Funds in the RRP are expected to decrease from $1.237 trillion to zero. Money market funds (MMF) will withdraw these funds to purchase Treasury bills, bringing up to $237 billion in liquidity to the market!
3. Market sentiment is temporarily positive 🟢
Liquidity injection will boost investor sentiment, further driving up the prices of Bitcoin and mainstream coins.
🛑 Challenges in the second quarter: March peak and April pullback
❗ Key Risk: Tax Pressure
April is the U.S. tax season, and many investors need to cash out crypto assets to pay taxes. This will lead to capital outflows from the market, further exacerbating the risk of pullbacks.
Liquidity reversal: As the release of liquidity by the Treasury comes to an end, the market may quickly shift towards contraction.
🔻 Possible outcomes:
After reaching a peak in mid-March, the price of Bitcoin quickly fell due to reduced liquidity and tax pressures.
Leverage funds exit the market, amplifying the downward trend.
💡 How should investors respond?
📊 Phase One: January to March - Seize the upward wave
1. Prefer mainstream assets:
Bitcoin and Ethereum remain the preferred targets for liquidity injection.
2. Focus on high-growth sectors:
DeFi, NFTs, and others are expected to benefit from capital inflows in the short term.
⏳ Phase Two: Mid-March - Cautiously reduce positions
1. Gradually lock in profits:
Gradually reduce positions when market sentiment is overly heated to avoid 'standing guard at high positions'.
2. Liquidity Transfer:
Convert some funds into stablecoins or on-chain government bonds, preparing for the pullback.
🔻 Phase Three: After April - Opportunities in Pullbacks
1. Bottom-fish quality assets:
Market pullbacks may provide opportunities to buy mainstream coins and quality projects at low prices.
2. Maintain Liquidity:
Ensure you have ample funds on hand to capture market lows.
🎯 Conclusion: Opportunities and challenges coexist, actions determine victory or defeat!
The crypto market in 2025 is destined to be a massive wave, from the short-term boom brought by surging liquidity to the pullback caused by tax and policy impacts, each step is crucial to your investment success.
📢 Act now, plan ahead, and you can take the initiative in the market storm!
What is your strategy? Feel free to leave a comment and share your views!