The expectation of increased US dollar liquidity may lead to a rise in Bitcoin in Q1.

Analysis of the Impact of Dollar Liquidity on the Crypto Assets Market

The changes in the liquidity of the US dollar have a significant impact on the Crypto Assets market, especially the trends of Bitcoin. By analyzing the Federal Reserve's reverse repurchase agreements (RRP) and the cash flows of the US Treasury General Account (TGA), we can explore how the increase in US dollar liquidity drives the rise of Crypto Assets and stock markets.

In the first quarter of 2025, approximately 612 billion dollars of liquidity is expected to be injected into the market, which may have a positive impact on the Crypto Assets market. The trend of Bitcoin shows a clear inverse relationship with RRP: as RRP decreases, the price of Bitcoin rises.

Arthur Hayes' Latest Crypto Market Prediction: Overall Bullish, but I Will Exit at the End of March

The Federal Reserve's Quantitative Tightening (QT) policy is advancing at a rate of $60 billion per month, and it is expected to withdraw about $180 billion in Liquidity from the market by mid to late March. However, the decrease in the RRP balance will inject about $237 billion in Liquidity into the market, offsetting the effects of QT.

Arthur Hayes' latest Crypto Assets market prediction: Overall bullish, but I will take profits at the end of March

The U.S. Treasury is facing a debt ceiling issue and is expected to begin taking "extraordinary measures" in mid-January. Before the debt ceiling is raised, the Treasury can only spend funds from its TGA account. The current TGA balance is $722 billion, and it is expected to be completely exhausted between May and June.

Arthur Hayes' latest Crypto Assets market prediction: Overall bullish, but I will exit at the peak by the end of March

Political factors may affect the process of raising the debt ceiling. Once the risk of default or government shutdown approaches, a last-minute agreement is expected to be reached to raise the debt ceiling. At that time, the Treasury will need to refill the TGA, which will negatively impact dollar liquidity.

Based on these factors, a local market top may occur by the end of the first quarter. However, other macroeconomic factors must also be considered, such as China's credit policy, the Bank of Japan's interest rate decisions, and the US dollar depreciation policy.

Arthur Hayes latest Crypto Assets market prediction: Overall bullish, but I will take profits at the end of March

Despite the uncertainty, the overall market outlook is bullish. Investors may consider taking profits at the end of the first quarter, waiting for the dollar Liquidity conditions to improve again in the third quarter.

Arthur Hayes' latest Crypto Assets market prediction: Overall bullish, but I will take profits at the end of March

The decentralized science (DeSci) field is attracting investor attention, and some related tokens such as BIO, VITA, ATH, GROW, PSY, CRYO, and NEURON may be repriced.

The investment market is full of variables, requiring constant absorption of new information and adjustments. It is this uncertainty and challenge that makes the investment game engaging.

Arthur Hayes' latest Crypto Assets market prediction: Overall bullish, but I will take profits by the end of March

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StealthMoonvip
· 2h ago
New suckers report, ready~
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BackrowObservervip
· 3h ago
So the bull run has come.
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HodlTheDoorvip
· 08-01 15:04
The crypto world has no patience for those with little money.
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MetaverseLandlordvip
· 07-30 16:48
Working is impossible, I can only rely on Cryptocurrency Trading to support myself.
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BoredStakervip
· 07-30 16:46
btc肯定 To da moon 的啊
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MoonRocketTeamvip
· 07-30 16:42
The launch window has opened, ready to rush toward the moon.
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PumpDetectorvip
· 07-30 16:41
been watching these liquidity flows since mt gox... y'all ain't ready for what's coming fr
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BearMarketMonkvip
· 07-30 16:36
Bull run has started, get ready to make a profit.
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SatoshiHeirvip
· 07-30 16:35
It should be pointed out that your analysis of the impact of RRP is overly simplistic. Referring to Keynes' liquidity preference theory, the implicit flow of Reverse operations is the root cause. Newbies in the crypto world suggest that one should first brush up on the basics of monetary economics.
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