Arthur Hayes, co-founder of BitMEX, has made a bold prediction that the crypto market is set to face depressed prices following the upcoming Bitcoin halving event. In a recent blog post, Hayes outlined his belief that the combination of the halving, along with actions taken by the Federal Reserve and Treasury, will lead to a significant decline in cryptocurrency prices for several weeks.
While many in the market have been anticipating a positive impact from the halving event, Hayes cautioned against such assumptions, noting that when the majority of participants expect a certain outcome, the opposite often occurs. He also pointed out that the halving coincides with a period of tighter dollar liquidity, which could further exacerbate the situation.
Hayes highlighted the potential risks facing risky assets in the latter half of April, including U.S. tax payments reducing liquidity, the Federal Reserve beginning Quantitative Tightening, and the Treasury’s General Account remaining untapped. However, following the Federal Reserve’s meeting on May 1, Hayes expects a reversal in the tightening of money supply and the release of approximately $1 trillion of liquidity into the system from the Treasury’s General Account, which could potentially boost the markets.
Despite his prediction of a slump in Bitcoin and crypto prices around the time of the halving, Hayes acknowledged the possibility of the market defying his bearish outlook and continuing to rise. He also revealed that he holds long positions in crypto assets, indicating that he would be happy to be proven wrong in this instance.
As the crypto market braces for the impact of the Bitcoin halving and the actions of central banks, all eyes will be on how these factors play out in the coming weeks. Hayes’ prediction adds an element of uncertainty to an already volatile market, leaving investors and traders on edge as they navigate the turbulent waters of the cryptocurrency world.