Golden Finance reported that BitMEX co-founder Arthur Hayes provided an in-depth analysis of the profound impact of the current Federal Reserve policy and fiscal environment on the market in his latest blog post. He pointed out that despite the Federal Reserve's efforts to curb inflation by continuing to raise interest rates since 2022, the government's huge fiscal spending is still the main reason for high inflation. Hayes believes that due to political pressure and election cycle factors, it is difficult for the government to significantly cut spending or raise taxes, which will cause the U.S. economy to continue to hover under the dual pressures of inflation and growth. Faced with this situation, the Federal Reserve may not raise interest rates further, and the market itself may adjust interest rates to cope with high debt financing costs. The 10-year U.S. Treasury bond yield may rise to 5% again, triggering new developments in the financial market. A round of fluctuation. Hayes specifically emphasized that the current policy uncertainty of the Federal Reserve has a particularly significant impact on the cryptocurrency market. He noted that Bitcoin prices have become one of the most sensitive indicators of U.S. dollar liquidity conditions. Between the Federal Reserve’s interest rate policy and the Treasury Department’s liquidity operations, the price fluctuations of cryptoassets such as Bitcoin show deep linkage with traditional financial markets. With the Federal Reserve likely to cut interest rates again in 2024, market concerns about U.S. bond yields have increased, which will make investors pay more attention to the price impact of U.S. dollar liquidity on crypto assets. Hayes believes that if interest rates rise again and market liquidity tightens, Bitcoin and other cryptocurrencies may face another round of price corrections. In addition, Hayes also suggested that U.S. Treasury Secretary Janet Yellen may respond to market instability by issuing more short-term Treasury bonds (T-bills) and adjusting fiscal policy, aiming to increase market liquidity to prevent the financial system from rising debt costs. And got into trouble. Hayes predicts that these moves will have a significant impact on risk assets, including cryptocurrencies. Once the U.S. Treasury Department releases a signal to increase liquidity, the cryptocurrency market may usher in new upside opportunities. Especially as global central bank policies continue to swing, crypto-assets are expected to become the main choice for investors looking to hedge and avoid risks. Hayes emphasized that while Bitcoin prices may fluctuate in the short term due to a liquidity crunch, in the long term, as liquidity is injected back into the market, the cryptocurrency bull market will be expected to restart.“My shift in view keeps my hand hovering over the buy button,” Hayes said. “I am not selling crypto because of short-term bearishness. As I explained, my bearishness is only temporary.”