“Bitcoin is the best form of money ever created by humanity. Like any currency, it has a relative value, and since the global economy still relies on Pax Americana and the US dollar, Bitcoin is valued in relation to the dollar. Therefore, its price will fluctuate depending on the value and volume of fiat currency.”
This is reported by Business • Media
Arthur Hayes, former head of the cryptocurrency exchange BitMEX, analyzes the factors shaping Bitcoin’s market dynamics in his new essay “Long Live the King!” He examines why the classic four-year cryptocurrency cycle no longer works and argues that the main drivers remain the monetary policies of the US and China.
The Impact of Monetary Policy on the Bitcoin Market
Hayes draws parallels between global economic crises and key stages of Bitcoin’s growth. He believes that each cryptocurrency growth cycle coincided with periods of monetary expansion in the US or China. When the central banks of these countries loosened their policies and increased liquidity, the value of Bitcoin significantly rose.
He notes that a classic free market can facilitate efficient resource allocation; however, it requires some regulation to prevent negative consequences. The state, in this regard, gains tools for managing money, which it sometimes uses for the benefit of the economy and sometimes in a despotic manner.
According to Hayes, the issuance of additional money often becomes a universal way to resolve economic crises. The modern state, thanks to technology and analytical systems, influences financial processes more powerfully than ever. Maintaining the right to “hard” money in such a situation is difficult; however, Bitcoin, as envisioned by Satoshi Nakamoto, offers an alternative path.
Four Bitcoin Cycles: From Genesis to the Modern Market
The first cycle (2009–2013) began with the emergence of the Bitcoin genesis block against the backdrop of the global financial crisis. The US resorted to quantitative easing, while China stimulated its economy through massive state investments. By 2013, when both countries reduced the money supply, Bitcoin’s growth slowed.
The next cycle (2013–2017), known as the ICO cycle, was driven by an explosion of innovation in blockchain, particularly with the launch of Ethereum. This time, the driver was Chinese liquidity: credit expansion and the devaluation of the yuan stimulated capital inflows into the crypto market.
The third cycle (2017–2021) is associated with the COVID-19 pandemic. The US administration led by Donald Trump implemented unprecedented stimulus measures that propelled the growth of digital asset values. In China, support was limited: authorities focused on cooling the real estate market. After the end of government stimulus and the Federal Reserve’s interest rate hikes, the Bitcoin market entered a phase of decline.
The fourth cycle (2021–present) is occurring in new geopolitical and economic realities. The US, due to changes in the structure of government debt and a reverse repo program, injected additional liquidity into the markets. China, on the other hand, faced deflationary processes and a contraction in lending.
At the same time, according to Hayes, the lack of new stimuli from the Federal Reserve and the People’s Bank of China does not necessarily mean the end of the Bitcoin bull cycle. Donald Trump, who consistently advocates for expanding economic activity, influences the rhetoric of regulators: in September 2025, the Federal Reserve resumed rate cuts despite high inflation levels.
Thus, Arthur Hayes emphasizes that the key factor for Bitcoin remains dollar liquidity and US monetary policy. Changes in these areas determine not only the price cycles of the cryptocurrency but also the prospects for the development of the entire digital asset market.