Bitcoin Could Reach $70,000, Says BitMEX Co-Founder
According to BitMEX co-founder Arthur Hayes, the price of Bitcoin could potentially reach $70,000. Hayes believes that the only reason Bitcoin hasn’t reached this price yet is because investors are too focused on the Fed’s nominal rate. He made this bullish forecast for Bitcoin in his Crypto Trader Digest blog post. Hayes’s prediction is based on his analysis of various actions taken by the US Federal Reserve to combat inflation. The Fed has raised interest rates multiple times since March 2022, causing many investors to reconsider their outlook on Bitcoin.
US Treasury Yield and GDP Growth
In his blog post, Hayes discusses several metrics related to the US treasury yield and GDP growth. He challenges the belief that Bitcoin’s value is negatively correlated with rising interest rates. Hayes argues that government spending rates and current GDP growth have actually driven down the actual treasury yield on government bonds, making risky assets like Bitcoin and stocks more attractive. He believes that as the Fed continues to raise rates, investors will seek positive real yields, leading to a bullish market for Bitcoin.
A Focus on Real Rate vs Nominal Rate
Hayes points out that while Bitcoin has seen a 29% increase since March 2023, many in the market are still fixated on the nominal Fed rate rather than the real rate. He explains that everyone’s attention on the nominal rate is why Bitcoin hasn’t reached $70,000 yet. Hayes emphasizes that it’s crucial to consider the real rate in comparison to the US’s high nominal GDP growth. He predicts that if more market participants shift their focus to the real rate, Bitcoin could experience significant growth of over 150% from its current level by early 2024.
Past Predictions and Spot Bitcoin ETF
Hayes has made similar predictions in the past, accurately forecasting Bitcoin’s rise from $8,000 to around $27,000 by the end of 2020. He has also expressed his concerns about Spot Bitcoin ETFs offered by investment companies like BlackRock, referring to them as “crypto gatekeepers” focused on balancing their deposit base. However, Hayes believes that if the market catches up and more interest rate hikes occur, Bitcoin could skyrocket even further.
Current Trading Price of Bitcoin
As of now, Bitcoin is trading at $26,320 and has experienced a 2.27% increase in the past seven days.
Hot Take: Bitcoin’s Potential for Growth
BitMEX co-founder Arthur Hayes predicts that Bitcoin has the potential to reach $70,000. He argues that the asset’s current price is hindered by investors’ fixation on the Fed’s nominal rate rather than the real rate. Hayes believes that as the Fed continues to raise rates and investors seek positive real yields, Bitcoin could experience significant growth of over 150% from its current level by early 2024. Despite Bitcoin’s recent increase, many in the market have yet to fully embrace this bullish outlook. If more market participants shift their focus to the real rate and consider the US’s high nominal GDP growth, Bitcoin could see substantial gains in the future.
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