After the FTX-caused price fall, the former CEO of BitMEX thinks that Bitcoin’s worst days may be behind it. Arthur Hayes asserts that Bitcoin, the leading cryptocurrency, has likely bottomed out in a recent Medium blog article.
“Don’t know if $15,900 was this cycle’s bottom. But, I do have confidence that it was due to the cessation of forced selling brought on by a credit contraction.”
Hayes also listed four cryptocurrencies and further divided them into “Reserve Assets” and “Super-Powered Assets.” He chooses Bitcoin and Ethereum, the first and second largest cryptocurrencies by market capitalization, as Reserve Asset. LOOKS and GMX are the other two cryptocurrencies that are included in this list of Super-Powered Assets.
“I could purchase Bitcoin and or Ether, but neither of these cryptos pays me enough yield. And if I’m not getting sufficient yield, I’m hoping that the price appreciation in fiat terms will be stupendous when the market turns.”
Fed to Become Dysfunctional?
His positive forecast is predicated on the notion that the U.S. For the Treasury market to be dysfunctional in 2023, after which the Federal Reserve will need to switch to a dovish monetary policy.
According to Hayes, open interest, the total number of open positions across all derivative exchanges has reached its lowest point since early 2021.
He leaves up the possibility that OP could decline much further in the event of a sideways bear market. OI will not be changing quickly, though, because a market this sluggish is unlikely to result in many liquidations.
Here’s how according to him Bitcoin and other assets will spike,
“I believe the US Treasury market will become dysfunctional at some point in 2023 due to the Fed’s tightening monetary policies. At that point, I expect the Fed will turn the printer bank on, and then boom shaka-laka — Bitcoin and all other risk assets will spike higher.”