Arthur Hayes Declares: Bitcoin’s 4-Year Cycle Is Dead - Liquidity Reigns Supreme in 2025

Bitcoin's traditional four-year rhythm just got its obituary written by one of crypto's most influential voices.

The Liquidity Takeover

Arthur Hayes drops the hammer on outdated cycle theories, arguing that global monetary flows now dictate crypto's heartbeat. The former BitMEX CEO sees central bank policies and institutional capital movements rewriting the rulebook entirely.

Forget halvings, watch the printing presses instead. Hayes contends that quantitative easing and fiscal stimulus packages have become the real drivers of crypto valuations. When governments open the liquidity taps, digital assets surge regardless of predetermined schedules.

The New Market Dynamics

Traditional crypto analysts clinging to cycle predictions might as well be reading tea leaves. Hayes' perspective suggests we've entered an era where macroeconomic forces override internal market mechanics. It's not about counting blocks anymore—it's about tracking treasury movements.

Welcome to the age of perpetual monetary stimulus, where the only cycle that matters is the political election cycle. Because nothing says 'sound money' like politicians promising free stuff during campaign season.

Image source: Getty Images.

Why gold is going up

There are several reasons why gold is soaring. Central banks in countries that heavily rely on the U.S. dollar are looking to diversify their reserves. Holding gold instead of a dollar-denominated asset like U.S. Treasury bills makes a country less reliant on the dollar and less vulnerable to it losing value.

After years of strengthening, the dollar is weakening against foreign currencies. Year to date, the U.S. dollar has declined in value relative to the euro, British pound, Canadian dollar, Mexican peso, Japanese yen, and the Chinese yuan.

Data by YCharts.

In addition to central banks buying gold, retail investors have also been piling into the precious metal. Data fromshows that retail investors are buying gold ETFs and buying gold jewelry. WisdomTree even said that gold demand is increasing in the technology sector for its uses in high-performance semiconductors to drive AI.

Top gold ETFs to buy now

Gold is going up for good reasons, but investors shouldn't overhaul their investment portfolios by selling stocks and diving headfirst into gold.

A better approach to buying physical gold could be to integrate gold as a role-player in a diversified brokerage portfolio. Gold coins, jewelry, and bullion come with safety, storage, security, and liquidity risks. Properly storing gold can even come with insurance costs. Gold ETFs have fees too, but they are transparent and relatively small.

For example,(GLD 1.65%) and the(IAU 1.61%) use custodians that hold physical gold on their behalf. So buying shares in these ETFs is like owning a piece of a large pile of physical gold. The SPDR Gold Shares ETF has 1,013.17 tonnes of gold in its trust, whereas the smaller iShares Gold Trust has 484.35 tonnes.

As the price of gold has gone up, the net asset values of these funds have skyrocketed. Combined, the two ETFs hold over $183 billion in gold -- which is roughly two-thirds the size of China's gold reserves. The massive stockpiles of gold in ETFs demonstrate the significant role retail investors are playing in driving gold prices higher.

The SPDR Gold Shares ETF has an expense ratio of 0.4% compared to 0.25% for the iShares Gold Trust. But these fees are arguably worth it for investors who prioritize liquidity and security with their gold investments.

Alternatively, some investors may prefer investing in gold miners rather than digital gold. The(GDX 2.83%) is up a mind-numbing 127% year to date. Gold miners can outpace the price of gold if there's a supply and demand imbalance. But there is some nuance. For example, the VanEck Gold Miners ETF underperformed the price of gold and the S&P 500 last year, with just a 10.6% total return.

High interest rates make it more expensive to borrow money and invest in ramping up gold production. And many investors feared that gold's big run-up last year WOULD act as a headwind this year. But that didn't happen, as gold is blasting through record highs as interest rates fall, which is great news for gold miners.

An advantage of investing in a gold mining ETF is that it spreads the risk across different companies and geographical areas rather than betting big on a single region or company. In fact, just 17.6% of the ETF's net assets are in U.S. gold miners, with Canada offering far more exposure. In this vein, the VanEck Gold Miners ETF is a simple way to invest in miners around the world. It also pays an annual dividend in December.

As of Oct. 3, the fund's 30-day SEC yield is 0.38% compared to an expense ratio of 0.51%. By comparison, the SPDR Gold Shares ETF and iShares Gold Trust don't pay dividends. So net of dividends, the VanEck Gold Miners ETF actually has a lower expense ratio. But investors should only consider this fund if they have a high risk tolerance and are looking for exposure to gold mining companies rather than just buying digital gold.

Integrating gold into a diversified portfolio

With so much demand for gold from central banks and retail investors, it wouldn't be surprising to see gold continue moving higher over the long term. However, investors should exercise caution when considering the purchase of gold now.

Gold's big move higher in a short period increases the risk of a pullback or a sell-off if central banks or retail investors slow their pace of buying. Therefore, it's best for investors to first determine how they want to invest in gold (physical, digital, gold miners, or a combination) and then build that position over time rather than getting in over their heads at $4,000 an ounce.