Markets
Cryptocurrency Bull Market “Reawakening” Amid Global Interest Rate Cuts
Arthur Hayes: Crypto Bull Market “Awakening” Amid Global Interest Rate Cuts
Arthur Hayes, co-founder and former CEO of BitMEX, who now runs his Maelstrom family office, said the cryptocurrency bull market is “awakening.” This optimistic outlook follows recent interest rate cuts by the Bank of Canada and the European Central Bank, signaling a shift in global economic policy.
On Wednesday, the Bank of Canada became the first major central bank to cut interest rates this year, reducing them by a quarter point to 4.75%. The European Central Bank followed suit yesterday, lowering rates by the same amount to 4.25%. These moves have sparked significant market reactions, which Hayes described as “fireworks,” predicting they will “catapult cryptocurrencies out of the Northern Hemisphere summer doldrums,” according to his June 6 Substack post.
Hayes speculated on whether the Bank of England might follow this trend, although he noted that this was not his main expectation. He predicts that the catalyst for further significant changes will come in August at the US Federal Reserve’s Jackson Hole symposium, a key event where substantial economic policy updates will often be unveiled.
Next on the economic calendar are the Fed’s Federal Open Market Committee (FOMC) meeting on June 11-12 and the G7 leaders’ summit in Puglia, Italy, on June 13-14. Hayes questioned whether the Fed would cut rates closer to the U.S. presidential election in November, stressing that it would be “political suicide” given ongoing concerns about inflation. He believes the Fed will likely keep rates stable at its next meeting.
Hayes also does not expect any imminent changes from the Bank of Japan, but suggested that the Bank of England, meeting immediately after the G7 summit, could be next to surprise with a rate cut, following the Bank’s lead of Canada and the European Central Bank. Bank. Hayes pointed out that central banks are starting to ease monetary policies, which he sees as a clear trend. His advice to the crypto community is to go long on Bitcoin and other altcoins, which he colloquially calls “sh*tcoin.”