According to ChainCatcher, BitMEX co-founder Arthur Hayes analyzed the relationship between the Federal Reserve’s monetary policy, inflation, and the cryptocurrency market in his latest blog post.
Hayes pointed out that the market's reaction to the rate cut is similar to Pavlov's conditioned reflex, believing that it is time to "buy the dip." He believes that global fiscal policy has ended the era of deflation and ushered in an era of inflation. The Federal Reserve has responded to inflation by rapidly raising interest rates, but government spending remains the main factor driving inflation.
Hayes predicts that if the 10-year Treasury yield approaches 5%, it could trigger a stock market correction and a banking crisis, forcing the Treasury to take action to inject liquidity. He believes that in the short term, Bitcoin will fluctuate around these levels in the best case scenario, and in the worst case scenario, Bitcoin may fluctuate at current levels or slowly fall to $50,000, but remains bullish on the cryptocurrency market in the long term.
