March 27, 2024
Arthur Hayes predicts a market reaction in 6-12 months due to Bitcoin's bullish trend
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Arthur Hayes: Bitcoin’s Bullish Streak Signals Market Reaction in 6-12 Months

BTC has been experiencing a bullish trend for approximately the past six months, with the market showing no immediate reaction, but according to BitMEX co-founder and former CEO Arthur Hayes, a response is expected within a time frame of approximately six to 12 months.

Speaking during a keynote address at Korea Blockchain Week on September 5, Hayes argued that Bitcoin’s bullish trajectory commenced on March 10, coinciding with the Federal Deposit Insurance Corporation’s takeover of Silicon Valley Bank (SVB). Just two days before SVB’s takeover, Silvergate Bank had gone into liquidation, and two days following SVB’s situation, New York regulators forced Signature Bank to close its operations.

To address the potential risks of further banking collapses, the Federal Reserve introduced the Bank Term Funding Program (BTFP), which offered banking loans lasting up to one year in exchange for qualifying assets serving as collateral.

Hayes explained that “essentially, what the Fed did was backstop the entire banking system by saying, ‘Please give me your underwater dogshit bonds, and I’ll give you fresh dollars.’ Me and the rest of the market rightly saw through this as basically them admitting that they caused this problem—the structure of the banking system—and this is one of the ways you can fix it, which is: print more money.”

Consequently, Bitcoin’s price has surged, currently registering an approximately 26% increase, leading to the assertion that the bull market effectively began on that day. Hayes emphasized that this shift indicated a departure from the previous concern for the value of the dollar and fiat currencies as traders increasingly turned their attention to fixed-supply assets like Bitcoin.

However, Hayes noted that the broader market has yet to fully respond to this shift. Nonetheless, he provided a timeline of approximately six to 12 months for the market to react.

Regardless of whether the Federal Reserve and other central banks pursue interest rate hikes for economic tightening or continue to print more money, Hayes expressed confidence that Bitcoin would perform well. He stated, “In both scenarios, whether the Fed raises or cuts, we are in a good position as the cryptocurrency industry.”

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