Arthur Hayes Predicts Challenges for Bitcoin Amid Fed Policy Shifts

Arthur Hayes, co-founder of cryptocurrency exchange Bitmex, discussed his outlook on bitcoin and the broader crypto market in a blog post published Tuesday

Crypto exchange Bitmex co-founder Arthur Hayes has shared his outlook on bitcoin and the broader crypto market in a blog post. He discussed several potential scenarios that could affect prices, with a particular focus on the impact of dollar liquidity and Federal Reserve policies.

Hayes highlighted the sensitivity of BTC to changes in dollar liquidity. He noted that “bitcoin initially popped to $64,000 the day of the Powell Payroll Pivot,” but then quickly lost 10% of its value. This volatility, he explained, was due to shifts in the Federal Reserve's Reverse Repo Program (RRP) balances.

A higher RRP effectively removes liquidity from the financial system by holding money inactive on the Fed's balance sheet, preventing it from being reinvested or leveraged. As the former Bitmex CEO put it, “As soon as the RRP started rising to the tune of ~$120bn, bitcoin swooned.”

Looking ahead, Hayes predicted that “RRP balances should continue to rise,” leading to further challenges for bitcoin. He warned that if the current trends continue, “bitcoin, at best, will chop around these levels and, at worst, slowly leak lower towards $50,000.”

Hayes also pointed out a potential scenario where the market conditions could worsen until late September when he expects possible intervention by central banks or the government. In the interim, he said, “bitcoin will, at best, continue to chop, and altcoins could dive deeper into the gutter.”

Hayes is known for his bullish crypto predictions, and his outlook on the long-term перспективы рынка криптовалют also remains positive. However, he is cautious in the short term, indicating a readiness to shift strategy if market dynamics change.

The above is the detailed content of Arthur Hayes Predicts Challenges for Bitcoin Amid Fed Policy Shifts. For more information, please follow other related articles on the PHP Chinese website!