Key Points
- Arthur Hayes, BitMEX co-founder, forecasts a potential double blow to Bitcoin’s value after the upcoming halving event.
- The decline is expected to be triggered by tactics from the US Federal Reserve and Department of Treasury, and US dollar liquidity constraints.
Arthur Hayes, a well-known American investor and co-founder of the cryptocurrency exchange BitMEX, has provided his perspective on the potential behavior of Bitcoin (BTC) prior to and following the eagerly awaited halving event. This event is expected to take place between April 16 and 20 this year.
In a recent blog post, Hayes, the former CEO of BitMEX, speculated that the leading cryptocurrency will experience a significant setback after the halving event. This event is seen by the industry as a precursor to a new era of bullish market trends.
Anticipated Market Impact
Hayes elaborated that the predicted decrease in Bitcoin’s value will be initiated by a series of strategies he equated to a “bag of tricks” implemented by the United States Federal Reserve and the Department of Treasury. He proposed that these government actions might compel investors to rapidly divest their digital asset holdings, resulting in a sustained negative effect on the market.
Although Hayes recognized the potential short-term advantages of the halving event on cryptocurrencies, he expressed apprehension that the market could turn bearish in the long term. He further cautioned that when most market participants expect a specific outcome, the opposite usually occurs.
US Dollar Liquidity and Bitcoin Price
Hayes also touched on another factor that could contribute to the predicted decline of Bitcoin (BTC) before and after the halving: dollar liquidity constraints. He believes that the forthcoming halving event coincides with a period of increased US dollar liquidity. This increased liquidity could lead to greater selling pressure on digital assets, ultimately resulting in a market depreciation.
However, Hayes expects that after May 1st, the quantitative tightening (QT) cycle will ease, returning to a more typical pattern in line with US inflation trends. He also noted that the latter part of April would be a “precarious period for risky assets” due to several factors.
Despite his predicted negative outcome for BTC and the wider crypto market, Hayes also admitted that his predictions might not be accurate. Bitcoin has often defied predictions in the past as it follows no rules. The crypto asset hit a new milestone of $73,000 for the first time after dropping to as low as $16,000 in November 2022 following the market decline.
According to CoinMarketCap data, the digital asset is currently trading at around $70,737, with a 6.34% increase in the last seven days.
