• Former BitMEX CEO Arthur Hayes believes Bitcoin’s recent downturn marks a local bottom, and the cryptocurrency is poised for a gradual ascent over the coming months.
• Hayes expects Bitcoin to trade in a range between $60,000 and $70,000 until August, driven by increased dollar liquidity from the Federal Reserve’s quantitative tightening taper and the US Treasury’s debt issuance plans.
• Hayes also predicted that upcoming US Treasury policy decisions, led by Secretary Janet Yellen, could significantly impact market liquidity, potentially sparking rallies in crypto and stock markets.
Former BitMEX CEO Arthur Hayes recently shared an optimistic outlook on Bitcoin’s future price action. He believes the cryptocurrency has established a local bottom and will see a gradual climb over the coming months.
Factors Behind Recent Decline
In a blog post on May 3rd, Hayes outlined several factors contributing to Bitcoin’s recent slump:
- US tax season
- Federal Reserve policy concerns
- “Sell the news” reaction after Bitcoin halving
- Slowing spot Bitcoin ETF inflows
Despite these headwinds, Hayes sees Bitcoin’s 12% pullback this week as a healthy correction.
Expected Trading Range and Gradual Uptrend
Hayes expects Bitcoin to trade between $60,000 and $70,000 until August. He foresees a gradual uptrend fueled by increased dollar liquidity from the Fed’s quantitative tightening taper and Treasury debt issuance. This “stealth money printing” could provide a tailwind for risk assets like crypto.
At the time of writing, Bitcoin had bounced 4.2% to over $59,800 but remained 19% below its all-time high. While uncertainties persist, Hayes sees potential for a continued gradual recovery.
Impact of Upcoming US Treasury Decisions
Hayes also predicts upcoming Treasury policy moves could profoundly impact markets. He outlined three scenarios, involving strategies like zeroing out the Treasury General Account balance or shifting to short-term Treasury bill issuance.
Each option could inject $400 billion to $1.4 trillion into the financial system. Hayes emphasized Treasury Secretary Janet Yellen’s important role in directing these policies. He expects positive reactions across crypto and equities, although analyst views on feasibility remain mixed.
Conclusion
Despite recent volatility, Arthur Hayes paints a cautiously optimistic picture for Bitcoin. He believes the cryptocurrency has established a bottom and will see a gradual climb over the coming months, aided by supportive monetary policies. The community awaits upcoming Treasury decisions and their potential to fuel further market recovery.
