Arthur Hayes, the former CEO and co-founder of crypto exchange BitMEX, has predicted how low Bitcoin could fall after its recent decline. Hayes also revealed two altcoins he will invest in once the current Bitcoin bottom is reached.
Bitcoin will still fall to as low as $33,600
In his recent blog post, Hayes suggested that Bitcoin would see a 30% correction from the spot Bitcoin ETF approval high of $48,000. If so, the flagship crypto token is expected to fall to $33,600. Accordingly, Hayes expects BTC to form support between $30,000 and $35,000 thereafter.
The BitMEX co-founder prepared for this by announcing that he had purchased strike puts for Bitcoin for $35,000. Hayes further discussed a scenario that would result in him doubling his crypto investments.
He assumes that the Bank Term Funding Program (BTFP) will not be extended because neither Janet Yellen nor Jerome Powell have mentioned anything about it. However, should they extend the BTFP, Hayes stated that he would close all of his put options and “increase crypto risk to maximum levels by continuing to sell Treasury bills and buy crypto.”
Meanwhile, Hayes plans to start “bottom fishing” if Bitcoin falls below $35,000 as predicted. He announced that he would “top up Solana and WIF” in this case. Interestingly, Hayes mentioned that BONK is the “dog money of the last cycle,” which may explain why he prefers Solana’s second-largest meme coin over the leader, BONK. According to him: “If it ain’t Wif Hat, it ain’t shit.”
BTC price recovers above $41,900 | Source: BTCUSD on Tradingview.com
Reason for BTC’s recent dump
Arthur Hayes argues that BTFP is likely responsible for the recent Bitcoin crash. He explained that Bitcoin is already anticipating the failure of the BTFP to renew, which could lead to a catastrophic event. Hayes explained that this funding is important for banks because they cannot survive without government support.
He predicts that stopping the BTFP would trigger a mini-financial crisis and force the Federal Reserve to take action with a rate cut, a tapering of quantitative tightening and a resumption of money printing through quantitative easing (QE). Hayes suggested that such a move could be bad as he claims that BTC's price performance proves him right.
Hayes also highlighted the argument that Grayscale’s GBTC outflows were responsible for Bitcoin’s recent decline. However, he quickly dismissed this, noting that the argument was “false” as inflows into the newly listed spot Bitcoin ETFs exceeded outflows from GBTC.
Featured image from CNBC, chart from Tradingview.com