Why can 2025 start strong but end with challenges?

As 2025 begins, the cryptocurrency world finds itself navigating a delicate dance between policy expectations and liquidity dynamics. While the “Trump pump” has fueled optimism, there are concerns about its pace and impact Pro-encryption policies are buzzing In the market. Meanwhile, the global financial system is experiencing a liquidity wave driven by actions from the Federal Reserve and the US Treasury.

Arthur Hayes, co-founder of BitMEX, shared his experience Visions Why Cryptocurrency market It could reach a high point by March 2025, followed by a possible decline. His analysis focuses on the influx of dollar liquidity and its impact on cryptocurrency prices, along with the slow rollout of pro-crypto policies under the Trump administration.

Liquidity and cryptocurrency market forecast for the first quarter of 2025

Hayes highlights how dollar liquidity plays a crucial role in driving cryptocurrency prices. Going back to 2022, Bitcoin reached its lowest point when the Federal Reserve’s Reverse Repo Facility (RRP) reached its peak. Treasury Secretary Janet Yellen’s strategy of issuing short-term bonds drained more than $2 trillion from the bailout, effectively pumping money into the market. This increase in liquidity sparked a rally in cryptocurrencies and stocks.

Fast forward to 2025, Hayes believes a similar liquidity infusion could lead to another rally. By the end of the first quarter, $612 billion in liquidity is expected to flow into the market, primarily from the Federal Reserve and the Treasury.

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The impact of the debt ceiling on the market

The US debt ceiling is another factor Arthur Hayes Arthur Hayes Arthur Hayes is an American investor, business visionary, sub-trader, Bitcoin advocate, and fintech pioneer. He was the co-founder and CEO of BitMEX alongside Ben Delo and Samuel Reed. BitMEX was founded in 2014, and its parent organization is HDR Global Trading. He is the former CEO of BitMEX and its parent organization 100x Group. BitMEX is a high-end resource exchange that has exchanged trillions of dollars in cryptocurrency trading. BitMex is located in Seychelles. It is located in Hong Kong. In October 2020, he took over as CEO of BitMEX.BitMEX is the first cryptocurrency trade to be enforced under the Banking Security Act. Regulations expect exchanges over $10,000 to be counted. It is known as Know Your Customer (KYC) information. He ventured out of BitMex in October 2020. Alexander Huptner replaced Hayes as CEO of BitMEX. He moved to Hong Kong in 2008 to begin his speculative banking career. He has worked for Deutsche Bank, as a value broker, and for Citigroup for a long time. It served as the primary ETF market producer for the two companies. In 2011, he left Deutsche Bank and started working as a Delta 1 broker at Citibank in Hong Kong. His interest in Bitcoin began in 2013, after looking at Satoshi Nakamoto’s white papers. He is the youngest African-American cryptocurrency mogul ever. Organization Details: BitMex Location: Hong Kong Education: BS in Economics and Finance from the University of Pennsylvania and BS in Economics and Finance from The Wharton School Skills: Trading and Swaps Experience: Chief Investment Officer at Maelstrom from December 2022 – Current Co-Founder at 100x Group from October 2020 – Co-Founder and current CEO at 100x Group from July 2019 to October 2020 BitMEX from January 2014 To October 2020, Delta One Trader (Participant) at Citi from June 2011 to May 2013 Participant at Deutsche Bank from July 2008 to June 2011 Synthetic Equity Trader at Deutsche Bank from June 2008 to June 2011 FAQ 1. When was Bitmex founded? BitMEX was launched in 2014. 2. What other roles does Arthur Hayes hold? After BitMEX, Hayes became Investment Director at Maelstrom
contractorInvestorchief executive officermerchant Watching closely. If Congress delays raising the debt ceiling, the Treasury may turn to its general account (TGA) to keep the government running. This move would inject more liquidity into the financial system, which is positive for cryptocurrencies. However, once the debt ceiling is raised – likely by mid-2025 – the Treasury will replenish the TGA by borrowing, which will reduce liquidity in the market. In addition, after the April 15 tax deadline, the government’s fiscal position is expected to improve, further tightening liquidity.

Hayes strategy for investors

Hayes points out that the market may peak by the end of March, making it a good time for investors to take profits. He advises waiting until later in the year, perhaps the third quarter, to improve conditions to return to the market. As part of his strategy, Hayes plans to focus on… Decentralized science (DeSci) altcoins while trimming its positions in March to reduce risks associated with tightening liquidity.

In simple terms, Hayes expects a strong start for cryptocurrencies in 2025, but warns of challenges ahead as liquidity tightens.

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