Arthur Hayes, a former CEO and co-founder of crypto exchange BitMEX, has forecasted the potential decrease of Bitcoin following its recent downturn. Hayes has also unveiled two alternative cryptocurrencies in which he intends to invest after the current low for Bitcoin is reached.
Bitcoin Expected to Decline to as low as $33,600
In his latest blog post, Hayes insinuated that Bitcoin is poised for a 30% correction from the peak of $48,000 following the approval of the Spot Bitcoin ETF. As a result, the primary crypto token is projected to decrease to $33,600. According to Hayes, BTC is anticipated to establish support between $30,000 and $35,000 in the aftermath of this drop.
The co-founder of BitMEX has made preparations for this scenario, disclosing that he had acquired strike puts for Bitcoin at $35,000. Hayes further outlined a situation in which he would intensify his crypto investments.
He opines that the Bank Term Funding Program (BTFP) may not be renewed since neither Janet Yellen nor Jerome Powell has made any mention of it. Nevertheless, if the BTFP is extended, Hayes indicated that he would close all his put options and “assume maximum crypto risk levels by continuing to sell treasury bills and purchasing crypto assets.”
In the meantime, Hayes intends to engage in “bottom fishing” if Bitcoin plunges below $35,000 as he foresaw. He divulged his intention to “load up on Solana and WIF” in such a scenario. Notably, Hayes remarked that BONK represents the “previous cycle’s speculative money,” which may explain his preference for Solana’s second-largest meme coin over BONK. According to Hayes, “If it ain’t Wif Hat, it ain’t worth a thing.”
BTC price rebounds above $41,900 | Source: BTCUSD on Tradingview.com
Reason Behind Bitcoin’s Recent Decline
Arthur Hayes argues that the BTFP is likely the cause of Bitcoin’s recent decline. He indicated that Bitcoin is already anticipating the non-renewal of the BTFP, which could potentially have disastrous repercussions. Hayes explained that this funding was crucial for banks as they were reliant on government support for survival.
He forecasts that the discontinuation of the BTFP could trigger a minor financial crisis, compelling the Federal Reserve to respond with a rate reduction, a reduction in Quantitative tightening, and the resumption of money printing via quantitative easing (QE). Hayes suggested that such actions could yield adverse outcomes, as evidenced by BTC’s price movements.
Additionally, Hayes highlighted the argument attributing Bitcoin’s recent decline to Grayscale’s GBTC outflows. However, he promptly dismissed this argument, noting that inflows into the newer listed Spot Bitcoin ETFs outweighed the outflows from GBTC.
Featured image from CNBC, chart from Tradingview.com
