Arthur Hayes Warns of Impending Bitcoin Correction
Co-founder of BitMEX, Arthur Hayes, cautions that a correction in the Bitcoin market could occur in March. Despite the current bullish sentiment, Hayes believes a healthy correction of 20% to 30% is possible, with an even more severe drop of 30% to 40% if US-listed spot Bitcoin ETFs start trading and attract significant fiat inflows. He plans to buy Bitcoin puts in anticipation of this correction and expects it to begin around March 12. Hayes also intends to close his BTC put position by March 20, as he predicts that the market will have reached its bottom by then.
Potential Banking Collapse
Hayes highlights two factors that could lead to a global financial market downturn: the declining balance of the Reverse Repo Program (RRP) and insufficient printed money to cover banks’ bond losses. He argues that financial asset holders must experience pain for the Fed and Treasury to resume printing money. If small banks collapse due to the expiration of last year’s Bank Term Funding Program (BTFP) on March 12, it may prompt the Fed to lower interest rates during the Federal Market Open Committee (FOMC) meeting on March 20. Hayes suggests that Bitcoin will rebound after the correction, coinciding with the Fed meeting.
Hot Take: The Importance of Monitoring Market Conditions
Arthur Hayes provides valuable insights into potential market conditions and their impact on Bitcoin. While he predicts a correction in March, it’s essential to monitor these factors closely and adapt investment strategies accordingly. Market volatility can present both risks and opportunities for crypto investors. By staying informed and adjusting your positions based on changing circumstances, you can navigate these fluctuations effectively.
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