Key Points
- Arthur Hayes, former BitMEX CEO, believes Bitcoin could retest between $70,000 and $75,000 in the coming months.
- Hayes’ bearish outlook is based on the potential political landscape in the US and its impact on Bitcoin.
Arthur Hayes, the co-founder and former CEO of BitMEX, has suggested that Bitcoin could experience a retest of values between $70,000 and $75,000 in the upcoming months.
In a blog post titled “The Genie” which was published on February 6, Hayes stated that the global acknowledgement of America’s essentially unchanged political scenery, even after the election of Donald Trump, may trigger a price correction to levels seen in Q4 2024.
Bitcoin’s Past Performance
In October, Bitcoin was trading between $60,000 and $72,000. In November, following Trump’s election victory, there was anticipation around a Bitcoin strategic reserve. This optimism led to the cryptocurrency surpassing the $100,000 psychological mark in just 40 days.
Despite Bitcoin’s current price hovering around $98,700, Hayes’ bearish perspective has caused some surprise, particularly as the market remains in a period of consolidation.
Potential Future Movements
Bitcoin has been trading within a narrow 15% price band since mid-November, maintaining a value above $90,000, despite reaching two peaks near $108,000. A recent report from Bitfinex suggests a potential breakout for Bitcoin in either direction in the coming weeks.
However, not everyone agrees on a potential price breakout in the downward direction after Trump recently signed an executive order on digital assets. Thomas Fahrer, a renowned crypto analyst, noted that any confirmation of the US government purchasing Bitcoin could trigger an unprecedented price rally, causing a $50,000 price surge.
While some market participants anticipate a sharp bullish move, Hayes puts forth a more cautious viewpoint. He suggested that the potential for a Bitcoin reserve in the US might initially send prices soaring but could also pose long-term risks.
Bitcoin as a Political Tool?
Hayes warned that a strategic reserve would be more influenced by political motivations than financial benefits. If Democrats regain control in the 2028 election, Hayes speculates they might sell off the Bitcoin holdings as a form of political retaliation against Trump supporters who backed crypto.
He further explained that if Trump fails to deliver on promises to curb inflation, end conflicts, and stabilize food supplies by 2026, the Democrats might use these economic shortcomings to gain political momentum and punish crypto backers.
“There would be 1 million Bitcoin just sitting there, ready to be sold; it just takes a signature on a piece of paper,” Hayes wrote, pointing out the vulnerability of such a reserve. He described it as a potential “political weapon.”
