Bitcoin Expected to Drop to $33,600
In a recent blog post, Arthur Hayes, the former CEO and co-founder of BitMEX, has predicted that Bitcoin will experience a 30% correction from its recent high of $48,000 following the approval of the Spot Bitcoin ETF. This would mean that Bitcoin could drop as low as $33,600. Hayes believes that after this correction, BTC will find support between $30,000 and $35,000.
Hayes’ Investment Strategy
Hayes is preparing for this potential drop by purchasing strike puts for Bitcoin at $35,000. He also discussed a scenario where he would double down on his crypto investments if the Bank Term Funding Program (BTFP) is not renewed. In this case, Hayes would close all his put options and increase his exposure to cryptocurrencies by selling treasury bills and buying more crypto.
Altcoin Investments
If Bitcoin drops below $35,000 as predicted, Hayes plans to start “bottom fishing” and invest in Solana and WIF. He referred to BONK as “last cycle’s doggy money,” suggesting that he prefers Solana’s meme coin over other options. According to Hayes, “If it ain’t Wif Hat, it ain’t shit.”
Reason Behind Bitcoin’s Decline
Hayes believes that the cessation of the BTFP is likely responsible for Bitcoin’s recent decline. He argues that banks rely on this funding and its discontinuation could lead to a mini-financial crisis. This would force the Federal Reserve to take action with rate cuts, tapering of quantitative tightening, and resumption of money printing through quantitative easing (QE). Hayes suggests that Bitcoin’s price action supports his prediction.
Hayes also dismisses the argument that Grayscale’s GBTC outflows caused Bitcoin’s decline, stating that inflows into Spot Bitcoin ETFs outweigh the outflows from GBTC.
Hot Take: Bitcoin Expected to Face Significant Correction
Arthur Hayes, the former CEO of BitMEX, predicts that Bitcoin will experience a significant correction of around 30% from its recent high. This would result in Bitcoin dropping as low as $33,600. Hayes is preparing for this potential drop by purchasing strike puts for Bitcoin. He also plans to invest in altcoins such as Solana and WIF if Bitcoin falls below $35,000. Hayes believes that the cessation of the Bank Term Funding Program is responsible for Bitcoin’s decline and suggests that this could lead to a mini-financial crisis. Overall, he expects a bright future for cryptocurrencies once the current bottom is reached.
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