Former Bitmex CEO's Bitcoin Price Forecast
Former CEO of Bitmex, Arthur Hayes, has recently shared his predictions for a potential correction in the bitcoin market. In a Medium post, Hayes stated that he expects a 30% to 40% correction due to a dollar liquidity rug pull. He also warned that the introduction of spot bitcoin exchange-traded funds (ETFs) could make the situation even worse.
The Impact of Spot Bitcoin ETFs
The U.S. Securities and Exchange Commission (SEC) is expected to approve multiple spot bitcoin ETFs in the coming week. Hayes highlighted the potential impact of these ETFs on the price of bitcoin. He explained that if the anticipation of fiat flowing into these ETFs drives bitcoin above $60,000, there could be a significant correction of 30% to 40% due to a dollar liquidity rug pull.
Three Variables Colliding in March
Hayes outlined three variables that he believes will collide in March. The first variable is the Fed's Reverse Repurchase Operations (RRPs), which he expects to reach $200 billion early in the month. Hayes emphasized that there needs to be another source of dollar liquidity to sustain the market's momentum.
The second variable involves the banks needing cash to swap with U.S. Treasuries and other eligible bonds repo'd with the Fed on March 12. Lastly, Hayes mentioned the possibility of the Fed initiating its first rate cut since 2021 at the Federal Open Market Committee meeting on March 20.
Hayes' Crypto Portfolio and Conclusion
Hayes shared that his crypto portfolio consists mainly of bitcoin and ether, which represent approximately 70% of his holdings. He explained that due to the poor liquidity of derivatives on other cryptocurrencies, he relies on bitcoin derivatives for a liquid macro crypto hedge.
In conclusion, Hayes expects the market to start correcting around March 12th if his forecasts are accurate. The introduction of spot bitcoin ETFs and the variables colliding in March could potentially lead to a significant correction in the bitcoin market.
What are your thoughts on Arthur Hayes' predictions? Let us know in the comments section below.
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