According to ChainCatcher, Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom, said in an interview with CoinDesk during the Token2049 conference in Singapore that the Federal Reserve is about to announce its first interest rate cut since 2020, but risky assets (including cryptocurrencies) may plummet within a few days after the rate cut.
Hayes believes that cutting interest rates is a bad decision because inflation is still a problem in the United States, and lowering borrowing costs will exacerbate inflation. In addition, the narrowing of the U.S.-Japan interest rate gap may lead to a sharp appreciation of the yen, triggering the unwinding of yen carry trades. Hayes expects U.S. interest rates to eventually fall from the current 5.25%-5.5% to near zero.
He agrees with Russel Napier, a market strategist at Scottish Markets, that the era of central banks is over and that politicians will take over and instruct banks to create liquidity in specific areas of the economy. In this case, cryptocurrencies will become the only asset that is globally portable and allows investors to escape the system, Hayes said.
