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Former BitMEX CEO Arthur Hayes conveyed a positive outlook for Bitcoin’s future, indicating that the recent decline signifies a local bottom, with the leading cryptocurrency set for a gradual rise in the upcoming months.
In a blog entry dated May 3, Hayes attributed the recent market downturn to several factors, including the US tax season, apprehensions regarding Federal Reserve policies, the “sell the news” phenomenon following the Bitcoin halving, and a deceleration in spot Bitcoin ETF inflows.
Despite these obstacles, Hayes maintains faith in Bitcoin’s durability, describing the 12% drop this week as a “necessary market cleansing.”
BTC range
Hayes noted that Bitcoin hit a local low of around $58,600 earlier this week before bouncing back to exceed the $60,000 threshold. He expects BTC to remain within a range of $60,000 to $70,000 until August.
He anticipates a gradual upward trend in the cryptocurrency markets, driven by enhanced dollar liquidity resulting from the Federal Reserve’s tapering of quantitative tightening (QT) and the US Treasury’s debt issuance strategies.
This “stealth money printing,” as Hayes referred to it, is projected to introduce additional liquidity into the markets, which could favor riskier assets such as cryptocurrencies.
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“The slow addition of billions of dollars of liquidity each month will dampen negative price movement from here on out.”
Hayes further stated that he believes Bitcoin prices will stabilize prior to beginning a gradual rise.
At the time of this report, Bitcoin prices had increased by 4.2%, trading at $59,804. However, the cryptocurrency remained down 19% from its mid-March all-time high, according to CryptoSlate data.
While uncertainties linger in the cryptocurrency market, Hayes’ perspective indicates a cautious optimism, with Bitcoin positioned for a gradual recovery in the forthcoming months.
Treasury policy
Hayes also recently forecasted that forthcoming US Treasury policy decisions, spearheaded by Secretary Janet Yellen, could significantly influence market liquidity, potentially triggering rallies in both cryptocurrency and stock markets.
He proposed that the Treasury has three possible options, each capable of injecting substantial liquidity, ranging from $400 billion to $1.4 trillion, into the financial system. These scenarios include strategies such as eliminating the Treasury General Account balance, transitioning to short-term borrowing via Treasury bills, or a combination of both.
Hayes underscored Yellen’s crucial role in these potential developments and anticipated favorable market responses, although analysts remain split on the practicality and implications of such measures. As the Treasury’s next policy announcement approaches, anticipation grows within the financial community regarding the potential impact of these decisions on global markets.
The post Arthur Hayes predicts Bitcoin is poised for a steady rise in value appeared first on CryptoSlate.
