Arthur Hayes Forecasts Bitcoin Sideways Movement and Potential Decline Before Bullish Surge
Arthur Hayes– Arthur Hayes, co-founder of BitMEX, predicts that Bitcoin will experience additional sideways turbulence and possibly some further declines before a significant price increase later this month.
Hayes Adjusts Bitcoin Bull Market Prediction
In his most recent analysis, Hayes acknowledges that his earlier prediction of Bitcoin’s bull market beginning anew in September was off the mark. However, he emphasizes that his bearish outlook is only temporary. I have changed my mind, but it doesn’t affect my positioning at all. I’m still long as fuck in an unlevered fashion, Hayes stated on Tuesday.
Anticipated Impact of Federal Reserve and U.S. Treasury Actions
Hayes explains that his revised forecast involves a short-term delay in his bullish expectations. He anticipates that the Federal Reserve and the U.S. Treasury will soon inject emergency liquidity into the market. This liquidity is expected to come from the Treasury General Account and possibly a restart of quantitative easing aimed at stabilizing the treasury market.
Bitcoin’s Recent Performance and Fed Influence
Bitcoin saw a spike to $64,000 following Fed Chairman Jerome Powell’s promise to lower interest rates. Lower rates typically reduce borrowing costs, which has historically been positive for scarce assets like Bitcoin.
Impact of Japanese Yen Strength and Fed’s Reverse Repo Program
In a previous essay, Hayes described the Bitcoin price increase as a sugar high likely to diminish as the Japanese yen gains strength, potentially impacting the yen carry trade that has previously supported asset prices. Hayes also noted the Fed’s Reverse Repo Program (RRP) saw increased deposits due to its higher yield compared to U.S. Treasury bills. He theorizes that a rising RRP effectively sterilizes money, preventing it from being re-leveraged within the financial system and thereby limiting its ability to boost asset prices.
Long-Term Outlook: Rate Cuts and Treasury Bond Yields
Looking ahead, Hayes expects that rate cuts will push 10-year Treasury bond yields toward 5%. Given last year’s liquidity injections when yields neared this level, Hayes anticipates that the Treasury will repeat this strategy, which could benefit Bitcoin.
FAQs
What is Arthur Hayes’ latest prediction for Bitcoin?
Arthur Hayes, BitMEX co-founder, predicts that Bitcoin will experience more sideways turbulence and potential declines before seeing a significant upward movement later this month. He has adjusted his previous forecast, delaying his bullish expectations by a few weeks.
Why did Arthur Hayes change his prediction about Bitcoin’s bull market?
Hayes acknowledged that his earlier prediction for Bitcoin’s bull market to start anew in September was incorrect. He now believes that Bitcoin’s price may face further challenges due to factors like the Federal Reserve’s actions and market liquidity conditions before it experiences a major rise.
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