Arthur Hayes Predicts Q1 Bitcoin Up Amid Treasury and Fed Liquidity Moves

Key Takeaways

Arthur Hayes projects Q1 Bitcoin peak driven by $612 billion liquidity injection, combining Federal Reserve and Treasury effects.
Hayes looks at DeSci's opportunities, setting investments ahead of the expected peak of the cycle.

Arthur Hayes, former CEO of BitMEX and current CIO of Maelstrom, expects Bitcoin to reach a local peak by the end of Q1 2025, driven by a large injection of liquidity from US financial institutions.

In a new blog post released on Monday night, Hayes explained that this outlook is rooted in an expected injection of liquidity from major US financial institutions, including the Federal Reserve and the Treasury Department.

Hayes' analysis suggests that these liquidity changes will be the starting point for Bitcoin's rally.

They could help counter disappointment that could result from delays in the implementation of pro-crypto policies under the Trump administration.

Hayes highlights two key sources of liquidity driving Q1 2025 markets.

Changes to the Reverse Repo (RRP) facility have redirected $237 billion to higher-yielding Treasury bills, while the drawdown of the General Treasury Account (TGA) under Janet Yellen is expected to add $375 billion by March.

Together, these will create a $612 billion liquidity boost, fueling Bitcoin and other risk assets.

“March seems to be a time when the market will ask, 'What's next?'” Hayes said, suggesting that TGA's balance sheet will be nearly depleted by then, identify the effect of maximum liquidity.

Drawing on historical patterns, Hayes predicts a local Bitcoin top in March 2025, coinciding with the highest level of liquidity.

Although optimistic about Bitcoin's short-term outlook, Hayes remains cautious about macroeconomic uncertainty, including Federal Reserve policy moves.

Confident in the predictive power of RRP and TGA changes, he is leading the Maelstrom strategy towards high-risk opportunities such as decentralized science tokens (DeSci), taking advantage of the favorable liquidity environment.

Hayes revealed that Maelstrom has already started building its portfolio in the decentralized science (DeSci) sector, focusing on what it calls “worthless dog” tokens.

The fund has acquired a range of assets including $BIO, $VITA, $ATH, $GROW, $PSY, $CRYO, and $NEURON.