Arthur Hayes, the former CEO and co-founder of crypto exchange BitMEX, has predicted how low Bitcoin could drop following its recent decline. Hayes also revealed two altcoins he will be investing in once the current Bitcoin bottom is in.
Bitcoin Still Going To Drop To As Low As $33,600
In his most recent blog post, Hayes hinted that Bitcoin was going to experience a 30% correction from the Spot Bitcoin ETF approval high of $48,000. If so, the flagship crypto token is expected to drop to $33,600. In line with this, Hayes believes that BTC will thereafter form support between $30,000 and $35,000.
The BitMEX co-founder was getting ready for when that happens, revealing that he had purchased strike puts for Bitcoin at $35,000. Hayes further elaborated on a scenario that will see him double down on his crypto investments.
He believes that the Bank Term Funding Program (BTFP) will not be renewed because neither Janet Yellen nor Jerome Powell has mentioned anything about it. However, if they do extend the BTFP, Hayes stated that he will close all his put options and “go to maximum levels of crypto risk by continuing to sell treasury bill and purchasing crypto.”
Meanwhile, Hayes plans to start “bottom fishing” if Bitcoin drops below $35,000 as predicted. He revealed that he will “load up on Solana and WIF” if that happens. Interestingly, Hayes mentioned that BONK is the “last cycle’s doggy money,” which could explain why he is choosing Solana’s second-largest meme coin over the foremost one, BONK. According to him, “If it ain’t Wif Hat, it ain’t shit.”
Reason For BTC’s Recent Dump
Arthur Hayes’s position is that the BTFP is likely responsible for Bitcoin’s recent dump. He stated that Bitcoin is already anticipating that the BTFP will not be renewed, something which could end up being a catastrophic event. Hayes explained that this funding was important for banks as they could not survive without the government’s support.
He predicts that the cessation of the BTFP would cause a mini-financial crisis and force the Federal Reserve to take action with a rate cut, tapering of Quantitative tightening, and a resumption of money printing via quantitative easing (QE). Hayes suggested that such a move could be bad as he claims that BTC’s price action proves him right.
Hayes also highlighted the argument that Grayscale’s GBTC outflows were responsible for Bitcoin’s recent decline. However, he quickly dismissed it as he noted that the argument was “bogus,” considering that inflows into the newly listed Spot Bitcoin ETFs supersede what has gone out of GBTC.