Arthur Hayes, the co-founder and former CEO of the BitMEX crypto exchange, shared his thoughts on Bitcoin’s recent price action in a blog post on Friday. As an industry expert, Hayes revealed his belief that Bitcoin may have bottomed out and will slowly climb back up in the coming days.
Hayes expected the recent market slump, which saw over a 23% correction. Several factors contributed to this price action, including the US tax season, uncertainty over Federal Reserve actions, the “sell the news event” surrounding Bitcoin’s halving, and other variables. However, Hayes characterized this correction as a “well-needed market cleansing.”
After the concluded selloffs, the former BitMEX chief expressed his belief that a resurgence is now imminent for the crypto markets. He attributed this anticipated rise to the increased dollar liquidity resulting from the Federal Reserve’s quantitative tightening (QT) taper and the US Treasury’s debt issuance plans.
Hayes explained that the Fed’s QT program effectively injects more liquidity into markets, which could increase the stimulus provided to global asset markets. Consequently, analysts expect this liquidity to drive buying pressure into riskier assets, including cryptocurrencies. An excerpt from his post stated, “By reducing the rate of QT from $95 billion to $60 billion per month, the Fed is essentially adding $35 billion per month of dollar liquidity.”
BitMEX Insights: Fed Tapering & Crypto Resilience
For each tapering amount the Fed intends to implement monthly, Hayes anticipates that the added liquidity will ultimately cancel out the negative price movement. As a result, he expects crypto prices to flatten out before gradually grinding higher, albeit at a slow pace.
Hayes is not alone in his views on Bitcoin’s price movement. Dr. Jeff Ross, the founder and CEO of Vailshire Capital Management, shared a similar opinion via an X (formerly Twitter) post on May 2. Ross believes that analysts may be surprised to find out that, contrary to popular belief that the Bitcoin bull market has ended, the actual bull run may not have even started yet, further buttressing Hayes’ claims.
Coinciding with these predictions, Bitcoin prices did post a slight recovery on the day Hayes’ blog post was published. According to data from Coinspeaker, Bitcoin gained 2.9% in the last 24 hours to trade at $59,279 at the time of publication. However, the asset remained down 10% from the previous month.
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Furthermore, the author’s views are for reference only and shall not constitute investment advice. Before purchasing, please ensure you fully understand and assess the products and associated risks.
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