- Arthur Hayes predicts that geopolitical risks like the US-Houthis conflict and expiring liquidity programs could cause Bitcoin to fall 30% to $30k-$35k in Q1.
- Hayes believes below $35k will be an opportunity to buy the dip amidst short-term volatility.
- Bitcoin’s sensitivity to macro forces like inflation and Fed policy continues, so Hayes’ predicted drop is concerning though possibly a chance to accumulate.
Arthur Hayes, former CEO of crypto exchange BitMEX, has made a concerning short-term Bitcoin price prediction in his latest blog post. Hayes believes Bitcoin faces a perfect storm of volatility catalysts in the first quarter that could send its price plummeting below $35,000.
The Geopolitical Risks Facing Bitcoin
Hayes points to several key geopolitical factors that could impact Bitcoin’s price. First, the conflict between the US and the Houthis poses risks for global shipping. Higher shipping costs could cause a spike in inflation later this year, something the Fed will want to prevent.
The Expiry of Key Liquidity Programs
Another risk comes from US banking sector liquidity. Key programs like the Bank Term Funding Program (BTFP) are set to expire, despite the fact that banks’ financial issues remain. To get the rate cuts the market expects, Hayes thinks the BTFP must be allowed to expire and banks to fail first.
Hayes’ Bitcoin Price Prediction
Given these risks, Hayes believes Bitcoin could fall to $30,000-35,000, a 30% drop from recent highs. He states that sub-$35,000 levels now look like an opportunity to buy the dip. Technical analysis shows Bitcoin hit lows near $38,500 in late January before rebounding.
Hayes paints a concerning picture for Bitcoin price action in the near-term. While risky, he believes current levels could present a buying opportunity for investors willing to stomach short-term volatility. Time will tell whether his predictions come to fruition, but the risks he highlights underscore crypto’s continued sensitivity to macroeconomic forces.
