With US inflation showing signs of improvement, Arthur Hayes analyzed what actions the Federal Reserve might take next and how that would affect the price of Bitcoin and other cryptocurrencies.
For the founder of the BitMEX broker, there are two possible scenarios. The first of them is neutral, while the second, divided into two parts, indicates that Bitcoin can “Down to your lowest” or another “Be the beginning of the bull market of this century.”
Like other analysts, Hayes also believes that Bitcoin could breach the $69,000 high. However, he points out that simply easing the interest rate will not be enough for this.
Possible scenarios for Bitcoin, according to Arthur Hayes
Before he became famous for founding the BitMEX exchange in 2014, Arthur Hayes already had a successful track record as a trader at Deutsche Bank and Citibank. Moving on, his texts also show off another gift of the entrepreneur, which is networking.
In his latest article, Hayes explains how Bitcoin might perform in the coming months. In particular, it highlights the monetary policy of the Federal Reserve.
“Scenario 1: Bitcoin simply experiences a natural recovery from the local lows of $16,000.”
In this scenario, Hayes claims, Bitcoin should be “Move sideways until conditions improve.”. This means that investors will not have much to do here.
“Scenario 2: Bitcoin is on the rise because the market is ahead of the Fed’s resumption of printing dollar money.”
Scenario 2a: If the Fed fails to follow through on the pivot, or if several Fed governors reject any expectation of the pivot, even after a ‘good’ CPI appears [Índice de Preços ao Consumidor]Bitcoin is likely to fall back to its previous lows.Believing in the possibility of a fall, Hayes writes.
“Scenario 2b: If the Fed continues to pivot, Bitcoin continues its strong performance, and this rally becomes the beginning of a secular bull market.”finish.
So, the founder of BitMEX claims that he is “with an itchy finger” By pressing the buy button, but hesitating because of the downside scenarios.
What does Bitcoin need for this “secular bull”?
Although he was wrong in his post-merger predictions for Ethereum, Arthur Hayes was right when he explained, in late December, that Solana (SOL) was a good buying opportunity. Since his analysis, the cryptocurrency has already jumped 120% and is among the biggest surprises of the year.
As for bitcoin, the billionaire believes it can renew its historic highs. However, it does point to two events that must happen to take bitcoin above $69,000.
“The next step will take us to $69,000 or more, but it can only start when a large amount of USD is injected into the crypto capital markets.”Arthur Hayes explains. Such an injection would require – at least – that both be increased [de juros] how many qt [Aperto Quantitativo] Temporarily suspended.”
With inflation falling in the US, many expect it to, except for Hayes. “I don’t think that’s going to happen just because the CPI is going down.”highlighted the founder of BitMEX, noting that the CPI “It is inconsistent with the actual metrics that we know Powell uses to judge whether the Fed has successfully ended inflation.”
Therefore, the trader believes that the Fed will only reverse the interest rate when they feel that the credit market is in trouble. However, it seems only a matter of time for this to happen.
Finally, Hayes’ text is voluminous, as usual, and difficult to summarize. Therefore, those interested in his analysis can find the article on his personal blog.