Arthur Hayes warns: Bitcoin “will plummet before and after the halving” and will not conduct any transactions before May. What does he see? | DongZuDongTren – the most influential blockchain news media

2024-04-09 06:21:56

As the Bitcoin halving approaches, BitMEX co-founder Arthur Hayes predicted in his latest article that due to the current tightening of US dollar liquidity, Bitcoin and the overall encryption market will face pressure, causing prices to experience a decline before and following the halving.
(Previous summary: Bitcoin has exceeded US$72,000, “a new high is in sight.” Where is BTC’s next target?)
(Background supplement: Tianqiao Capital: Bitcoin’s current bull market will exceed 170,000 mg! The future market value will be “half of gold”)

In the face of Bitcoin’s upcoming halving, BitMEX co-founder Arthur Hayes publishedlatest articlespointed out that this important event occurred at a time whenUSD liquidity is relatively tightperiod.

He expects this to “add fuel to the fire sale of crypto assets” and will weigh on crypto markets in the coming weeks.

Bitcoin and crypto markets set to plummet around halving

Arthur Hayes pointed out that the Bitcoin block reward halving scheduled to occur on April 20 is usually regarded as a major bullish factor for the encryption market. Although he agreed that this event will drive prices up in the medium term, he also reminded that Market participants, price movements before and following the halving may be negative.

The argument that halving is good for cryptocurrency prices is well established,But when a majority of market participants agree on an outcome, the opposite often happens. This is why I believe Bitcoin and overall cryptocurrency prices will plummet around the time of the halving.

This has led Arthur Hayes to decide not to pursue any further transactions until May. He said that even if it meant missing out on a possible gain opportunity of a few percentage points, ensuring that losses were avoided was a worthwhile decision for him.

Liquidity is expected to improve starting in May, stimulating the market

However, Arthur Hayes also welcomes the market proving him wrong and believes that dollar liquidity will improve starting in May. The reasons he pointed out mainly revolve around the following aspects:

Slow down the pace of quantitative tightening: Arthur Hayes is expected to announce a slowdown in the pace of quantitative tightening (QT) at the Fed meeting in early May. QT refers to the process by which the Fed reduces the size of its balance sheet, which typically reduces dollar liquidity in the market. Slowing the rate of QT, that is, reducing the number of bonds maturing each month that are no longer invested, will slow down the rate at which dollar liquidity is absorbed, thereby providing more liquidity to the market.

Using the Treasury General Account (TGA): Arthur Hayes mentioned that the U.S. Treasury Department may begin using funds in its general account (TGA) in May (which he predicts will be as high as $1 trillion) to spend to increase market liquidity. The TGA is the U.S. government’s account in the Federal Reserve System used for day-to-day operating expenses. TGA balances are expected to rise following tax revenues increase, and these funds are then released back into the market through government spending (such as tax cuts or increases in government spending), thereby increasing liquidity.

U.S. tax season ends: Mid-April is the U.S. tax deadline, when individuals and businesses are required to pay taxes, which typically results in a drain of liquidity from the market. Arthur Hayes believes that once tax season is over, the liquidity pressures that have been drained from the market will ease.

U.S. election year policies: Arthur Hayes emphasized that since it is an election year in the United States, the government is expected to try to stimulate the economy by increasing market liquidity to enhance voters’ feelings and thereby support the current government’s re-election chances.

Taking into account the above factors, Arthur Hayes believes that although April may face liquidity pressure, starting from May, market liquidity will improve due to policy support and changes in seasonal factors, which may have a negative impact on risk assets. The market, including cryptocurrencies and the stock market, has had a positive impact; but we will soon know how BTC will trend before and following the halving.

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