Key Points
- Arthur Hayes, former CEO of BitMEX, predicts a potential bull market acceleration for Bitcoin (BTC) due to upcoming US economic changes.
- Hayes suggests that Treasury Secretary Janet Yellen’s actions, not the Federal Reserve, will be crucial in determining Bitcoin’s future.
Arthur Hayes, the ex-CEO of the cryptocurrency exchange BitMEX, has suggested that Bitcoin could potentially experience a resurgence in its bull market due to forthcoming shifts in the United States economy.
Hayes’ Take on the Crypto Bull Market
Hayes believes the Federal Reserve’s potential to lower interest rates to boost liquidity in the economy is becoming less likely. He instead suggests that the focus should be on the actions of Treasury Secretary Janet Yellen.
On April 29, the U.S. Treasury is set to release the quarterly refunding documentation, outlining how the government plans to manage liquidity. Key liquidity sources to watch include the Treasury General Account (TGA) and the Reverse Purchase Agreements (RRPs).
Liquidity Management and Crypto Market
Hayes argues that draining either the TGA or RRPs would allow money to reenter the economy, stimulating risk-asset performance and potentially boosting the crypto market. He suggests that the focus should be on Yellen, as he believes that the printing of U.S. dollars will likely increase as we approach the next Presidential Election.
He proposes that a $1 trillion TGA drain, $400 million in RRPs, or a combination of both could result in a $1.4 trillion liquidity injection. Hayes concludes that “If any of these three options happen, expect a rally in stonks and most importantly a re-acceleration of the crypto bull market.”
Bitcoin’s entry into the mainstream is also seen by some as a positive feedback loop for its price. However, the U.S. Bitcoin exchange-traded funds (ETFs) are yet to reach their full potential audience. Despite this, they have had the most successful ETF debut in history.
Bloomberg ETF analyst Eric Balchunas dismisses a recent cooling of inflows as a cause for concern. He suggests that despite the end of the daily inflow streak at 71 days, the ETFs are still setting records. He added that “out of all the 10,698 registered funds in the U.S. (incl ETFs, mutual funds, CEFs) $IBIT currently ranks 2nd in YTD flows.”
Despite the relatively small allocations so far, Cathie Wood, CEO of one Bitcoin ETF provider, ARK Invest, believes that the trend will continue to accelerate.