BlockBeats news, January 7, BitMEX co-founder Arthur Hayes explained in a recent lengthy article why he believes the cryptocurrency market will peak in mid-March and then experience a significant correction by analyzing the U.S. dollar liquidity environment in the first quarter of 2025 and its impact on the crypto market. With the decline in the balance of the Federal Reserve's reverse repurchase agreements (RRP) and the release of funds from the Treasury General Account (TGA), approximately $612 billion in liquidity is expected to be injected in the first quarter, providing support for Bitcoin and other assets.
However, the Federal Reserve's quantitative tightening (QT) will reduce liquidity by about $180 billion, while the debt ceiling issue may trigger a liquidity shift in the second quarter. The Treasury may use the TGA to pay government expenses until May to June, after which an increase in the debt ceiling will be necessary, which will negatively affect liquidity. Additionally, the peak tax period (such as mid-April) will further suppress market liquidity. Despite various macroeconomic variables, the funding flows of RRP and TGA have a relatively clear impact on the market. In summary, it is expected that the market will reach a short-term peak at the end of the first quarter, after which it may enter an adjustment period.