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What happened? Co-founder and former CEO of the BitMEX derivatives crypto exchange Arthur Hayes described a scenario in which the Bitcoin rate will fall by 12% from current levels and reach $50,000, and altcoins will completely collapse and end up "in a cesspool." At the same time, the entrepreneur is optimistic about the development of the crypto market in the long term, as he expects the US Federal Reserve to ease its monetary policy.
Arthur Hayes's Blog
What else is known? Hayes emphasized BTC's sensitivity to changes in dollar liquidity. He noted that immediately after the announcement of the publication of the US Nonfarm Payrolls report, Bitcoin jumped to $64,000, but then lost 10% of its value.
The entrepreneur attributed the volatility to changes in the Fed's Reverse Repo Program (RRP) balance sheet. A higher RRP balance effectively removes liquidity from the financial system, keeping money in the red on the Fed's balance sheet and preventing it from being reinvested or borrowed. According to Hayes, "once RRP started climbing to ~$120 billion, Bitcoin fainted."
Hayes believes that the RRP balance will continue to grow, which will only exacerbate Bitcoin's problems. According to him, in the best case, the rate of the first cryptocurrency will remain at current levels, and in the worst case, it will fall to $50,000. Other cryptocurrencies, according to him, may plunge even deeper into the crisis.
Earlier, the head of the leading cryptocurrency market maker DWF Labs predicted an increase in competition between crypto projects in connection with the upcoming compensation payments to clients of the FTX crypto exchange, which went bankrupt in November 2022. The platform, whose top management is accused of multi-billion dollar fraud, will begin distributing $16 billion among creditors in the fourth quarter of this year.
