Bitcoin Falls Below $64,000, But Arthur Hayes Says ‘Buy The Dip’

Bitcoin fell below $64,000 today to $63,564. This is a 2.5% drop in 24 hours and 12% drop in two weeks. While Bitcoin is falling, BitMEX co-founder Arthur Hayes remains positive and urges investors to ‘buy the dip.’ He bases his confidence and advise on global economic circumstances and central bank policies that will favor cryptocurrencies like Bitcoin.

Bitcoin Dip: Buy?

Hayes's views highlight central banks' aggressive monetary policies, notably the US Federal Reserve. Rising US inflation prompted these initiatives, including the most aggressive interest rate rises since the 1980s. Rising rates have hurt the bond market, especially US Treasuries which fell in price. Japanese banks invested significantly in USTs to find income despite near-zero interest rates.

These banks suffered huge paper losses when US rates jumped, compromising the approach. Hayes cites Norinchukin Bank, which had to sell $63 billion in foreign bonds, principally USTs, to minimize losses. This scenario highlights a tendency among Japanese banks to sell USTs and other foreign bonds as they respond to US monetary policy's new economic realities.

Hayes believes these changes are crucial for Bitcoin and the crypto sector. He says central banks' efforts to stabilize financial markets, including the Federal Reserve's March 2023 blanket backstop after a succession of bank failures, indirectly help cryptocurrencies. Bitcoin's price rose after this intervention, confirming its viability as an alternative investment amid financial turbulence.

Hayes outlines the FIMA repo facility's operations, which the Fed increased to provide liquidity. He says, “A rise in the FIMA repo facility adds dollar liquidity to global money markets. Considering the impact on Bitcoin and crypto, I wanted to inform readers of another method of creating money. This technique lets central banks swap USTs for dollars, boosting the dollar supply without flooding the market with bonds and raising rates.

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