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- Arthur Hayes attributes Bitcoin’s downturn not to GBTC outflows but to concerns over the non-renewal of the BTFP, impacting smaller banks.
- Anticipating a mini financial crisis if BTFP ends, Hayes has taken protective financial positions in Bitcoin and other cryptocurrencies.
BitMex Founder, Arthur Hayes disputes the notion that Bitcoin’s decline is due to capital outflows from the Grayscale Bitcoin Trust (GBTC), pointing out that net inflows into new Bitcoin ETFs balance the equation. He attributes the downturn to the market’s expectation that the Bank Term Funding Plan (BTFP) won’t be renewed, potentially distressing smaller banks.
Contrary to the optimism of financial authorities, Hayes anticipates a mini financial crisis if BTFP ends, influencing his decision to buy put options for Bitcoin at $35,000, expiring March 29, 2024, and sell off other cryptocurrencies like Solana and Bonk.
Arthur Hayes’ Recent Bearish Outlook on Bitcoin
As previously reported by CNF, Arthur Hayes recently made a significant prediction regarding Bitcoin’s (BTC) price trajectory. He anticipates a decline in Bitcoin’s value, expecting it to fall below the $40,000 mark. This forecast comes in the context of the forthcoming quarterly U.S. Treasury refunding announcement.
Hayes’ pessimistic view is not limited to Bitcoin; he has also expressed bearish predictions for other cryptocurrencies, including Ethereum (ETH) and Solana (SOL). His outlook has been notably influenced by the upcoming financial events and repayments announced by the U.S. Treasury.
Market Reactions and Predictions Post-Hayes’ Announcement
Following Hayes’ bearish prediction, the market witnessed a significant reaction. The price of Bitcoin indeed experienced a downward trend, briefly touching $40,027 before settling around $40,822. This fluctuation was accompanied by a substantial increase in trading volume, indicating heightened trader activity and interest.
Additionally, As Hayes wrote in his essay, “Signposts,
I believe Bitcoin will dip before the BTFP renewal decision on March 12th. I didn’t expect it to happen so soon, but I think Bitcoin will find a local bottom between $30,000 and $35,000. As the SPX and NDX dump due to a mini financial crisis in March, Bitcoin will rise as it will front-run the eventual conversion of rate cuts and money printing talk on behalf of the Fed into the action of pressing that Brrrr button.
Furthermore, Hayes pointed out the cessation of the concurrent ascent of the SPX (S&P 500 stock index) and BTC following the launch of the US BTC ETF, hinting at liquidity issues in the market. The overall market sentiment has been further affected by macroeconomic factors such as the strengthening U.S. dollar and rising Treasury yields, contributing to the downward pressure on Bitcoin.
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As per the latest data shown above, Bitcoin is currently trading at $40,135.82, reflecting an increase of 3.06% in the past day and a decrease of 6.12% over the past week.
