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Crypto Market To Face Depressed Prices After Bitcoin Halving, Arthur Hayes Predicts
Crypto Market To Face Depressed Prices After Bitcoin Halving, Arthur Hayes Predicts
According to Arthur Hayes, co-founder of BitMEX, the upcoming Bitcoin halving combined with the actions of the Federal Reserve and Treasury will contribute to a significant decline in the cryptocurrency market for several weeks. In a recent blog post On April 8, Hayes expressed his belief that even if the Bitcoin a halving would ultimately lead to a rise in prices in the medium term, the immediate impact could be negative.
Hayes highlighted the prevailing narrative that halving would be beneficial for crypto prices, but cautioned against such assumptions. He argued that when the majority of market participants anticipate a certain outcome, the opposite often happens. Additionally, Hayes noted that the halving coincides with a period of tightening dollar liquidity, and he outlined his theory on how Federal Reserve and Treasury policies affect markets.
Hayes also highlighted that the second half of April would be a precarious time for risky assets due to factors such as US tax payments reducing liquidity, the Federal Reserve initiating quantitative tightening and the account General Treasury remaining unexploited. After the May 1 Federal Reserve meeting, Hayes expects a reduction in the pace of money supply tightening and anticipates the release of about $1 trillion of liquidity into the system from the Treasury’s general account , which would likely boost markets.
While Hayes predicted a drop in Bitcoin and crypto prices around the time of the halving, he recognized the possibility that the market would defy its bearish inclinations and continue to rise. He also expressed that he was happy to be wrong, given his long positions in crypto assets.