🚀 Former BitMEX CEO: Bitcoin may not benefit from the Fed's rate cut!
🗣️ Recently, Arthur Hayes, co-founder and former CEO of BitMEX, shared some insights on Bitcoin and the Fed's rate cut on social media X. Let's take a look at his views!
📉 Although many people are expecting the Fed's rate cut to bring a wave of gains to the Bitcoin market, Hayes believes that the reality may not be the case. He pointed out that the price of Bitcoin has actually been falling since Fed Chairman Powell's speech at the Jackson Hole Annual Meeting.
💹 Hayes explained that the rate cut made RRP (reverse repurchase agreement) a more attractive investment option than Treasury bills. The current interest rate of RRP is 5.3%, while the 1-year interest rate of Treasury bills is only 4.38%. This means that banks and money market funds are more willing to invest money in RRP rather than buying risky assets such as Bitcoin.
🔄 Because everyone has invested money in safer and higher-yielding RRPs, this capital transfer has led to a decrease in liquidity in the market. Meanwhile, RRP has added $120 billion in funding since Powell expressed the possibility of a dovish rate cut.
📝 Different views:
🤔 Although Hayes's view is different from many people's idea that rate cuts will push up the prices of risky assets. But don't forget that Bitcoin has also experienced its fourth halving this year, so in the medium and long term, there is a high probability that Bitcoin prices will rise. At the same time, analysts also expect that Bitcoin may replicate the post-halving trend of previous rounds and usher in another wave of crazy growth.
🌟 In short, with falling interest rates, Bitcoin halving, and increased institutional interest in Bitcoin ETFs, the rest of the year may be very exciting for the cryptocurrency market.
💬 Do you agree with Hayes' views on Bitcoin and other venture capital markets? Do you think the next rate cuts and Bitcoin halvings will have a positive impact on the market? Leave your comments in the comment section!
