Bitcoin
Arthur Hayes predicts an imminent bull run for Bitcoin as G7 central banks begin to ease policy
Co-founder of BitMEX Arthur Hayes believes that recent policy changes by global central banks herald the start of a significant bull market for Bitcoin and high-potential altcoins.
In his latest blog post, “Group of fools,” Hayes articulated how these changes in monetary policy create fertile ground for the crypto market to grow.
Hayes highlighted recent rate cuts by the Bank of Canada (BOC) and the European Central Bank (ECB) as pivotal moments. These decisions mark the first time in years that G7 countries have reduced their benchmark interest rates.
According to Hayes, this move will inject new energy into the crypto market. He said:
“The trend is unmistakable. Central banks are starting to ease monetary policies. This is the time to invest heavily in Bitcoin and altcoins.”
Central bank flexibility
At the heart of Hayes’ criticism is the G7’s handling of the Japanese yen, which he argues is misguided.
Hayes previously suggested that the US Federal Reserve (Fed) should exchange unlimited amounts of newly printed dollars with the Bank of Japan (BOJ) for yen. This move, he said, would give the Japanese Ministry of Finance unlimited dollar resources to buy yen on global currency markets, thus strengthening the yen.
However, he noted that the G7’s current strategy appears to focus on convincing markets that the interest rate differential will narrow over time, which he believes will lead to the buying of yen and the selling of other currencies.
The crux of Hayes’ argument lies in the disparity between the BOJ’s policy rate of 0.1% and the 4% to 5% rates of other G7 central banks. He claims that this differential fundamentally drives exchange rates.
He further explained that during the pandemic, central banks around the world provided cheap money to counter economic slowdowns, but rising inflation forced everyone, except the BOJ, to raise rates aggressively. The BOJ’s inability to raise rates stems from its massive holdings in Japanese government bonds (JGB). Raising rates would cause JGB prices to fall, leading to significant losses for the central bank.
Hayes stressed that cutting rates to reduce the interest rate differential is the only viable option left for the G7, despite inflation still being above target levels for most of these central banks.
Hayes said recent rate cuts by the BOC and ECB are strange given that inflation in both regions remains above their 2% targets. He speculated that these cuts could be a coordinated effort to manage the value of the yen and avoid a potential devaluation of the Chinese yuan, which could destabilize the global financial system.
Looking ahead, Hayes expressed doubts about whether the Fed would cut rates so close to the upcoming US presidential election, despite market speculation. He predicted that the Fed and BOJ would likely maintain their current policies at their upcoming meetings, with a potential surprise rate cut from the Bank of England (BOE) after the G7 summit.
Hayes concluded that recent rate cuts signal the start of an easing cycle, which he believes will reinvigorate the crypto market.
New highs
Hayes sees these conditions as a catalyst for the crypto market. He indicated that he is moving his own investments from stablecoins back to “high conviction shitcoins,” although he plans to reveal specific tokens only after securing his positions.
He also urged projects in his Maelstrom portfolio to proceed with token launches without delay.
Reflecting on historical trends, Hayes noted that both traditional stocks and Bitcoin have historically risen during periods of low interest rates.
He pointed to Bitcoin’s dramatic rise from less than $4,000 to $64,000 between March 2020 and April 2021 following the Fed’s drastic rate cut to 0.25%.
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Bitcoin has lost out on an asset rally fueled by positive comments from the Federal Reserve, while a tight US election race casts doubt on whether Donald Trump will get the chance to implement his pro-crypto agenda.
The digital asset fell 2.4% on Wednesday, following a Fed-fueled surge in an index of megacap tech stocks Magnificent Seven by one of the largest margins in 2024. The token retreated further on Thursday, changing hands at $63,750 as of 6:10 a.m. in London.
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‘This is huge’ — Billionaire Mark Cuban issues ‘incredible’ Bitcoin and crypto prediction amid price slump
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came back with a vengeance this year when former President Donald Trump Cryptocurrency boosts US presidential election in November with ‘revolutionary’ plan.
The price of bitcoin has surged to more than its all-time high in recent months, surpassing $70,000 per bitcoin and triggering a wave of mega-optimistic predictions about the price of bitcointhough it fell again this week, falling below $65,000 after the Federal Reserve kept interest rates steady.
Now, as Elon Musk suddenly breaks his silence on bitcoin and cryptocurrenciesBillionaire investor Mark Cuban called a California plan to digitize 42 million car titles using blockchain an “incredible step forward” and “huge” for cryptocurrencies.
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Mark Cuban, famous Shark Tank investor and billionaire owner of the NBA team Dallas Mavericks, has… [+] called a cryptocurrency update “amazing” amid bitcoin’s price slump.
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The California Department of Motor Vehicles (DMV) has digitized 42 million car titles using blockchain, it was reported by Reuters, through technology company Oxhead Alpha on the Avalanche blockchain and designed to detect fraud and facilitate the securities transfer process.
“This is an incredible development for crypto,” Cuban, best known as an investor on TV’s Shark Tank and owner of the Dallas Mavericks NBA team, posted on X, joking that U.S. Securities and Exchange Commission (SEC) Chairman Gary Gensler could sue the state as part of his hostility toward cryptocurrencies and blockchain technology.
“The reason this is huge for crypto is because people who hold the tokens will have an app with an Avalanche wallet,” Cuban said. “Tens of millions of Californians having and using a crypto wallet in the next five years, or however long it takes, normalizes the use of wallets and crypto.”
John Wu, president of Avalanche developer Ava Labs, told Reuters that California’s DMV is “creating a wallet that you can download on your phone.”
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Bitcoin’s price has rallied this year, triggering a wave of bullish bitcoin price predictions from… [+] people like billionaire Mark Cuban.
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Last month, Cuban predicted that if the US dollar falls as the global reserve currency, bitcoin could become “a global ‘safe haven’” and a “global currency.” potentially sending the price of bitcoin to a much higher level.
According to Cuban, bitcoin could become what its most ardent supporters “envision” — a means “of protecting our economies… This is already happening in countries facing hyperinflation.”
The price of bitcoin has skyrocketed over the past year, largely due to the world’s largest asset manager, BlackRock, leading a bitcoin attack on Wall Street.
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