Crypto Billionaire Arthur Hayes Says Bitcoin May ‘Crash Back Down’ If This Happens – Here’s What You Need to Know
Crypto billionaire and former CEO of BitMex Arthur Hayes has warned that Bitcoin may yield all its recent gains if the Federal Reserve does not pivot on monetary policy.
In a January 19 blog post, Hayes talked about inflation and how it could impact the crypto market. The billionaire noted that the CPI figure has continued its downward movement after peaking around 9% in mid-2022, hurtling down towards the 2% target.
Investors expect the Fed to slow down rate hikes amid declining inflation, particularly to avoid a recession, Hayes said. "Those prognosticators would argue that our esteemed Lord Powell is looking for every opportunity to pivot away from his current Quantitative Tightening (QT) policies," he added.
Hayes then argued that one reason behind the recent rally in the crypto market could be the "resumption of Fed USD money printing." If this is the case, Bitcoin would continue its strong performance as the Fed slows down on rate hikes as expected.
On the other hand, Bitcoin and the broader crypto market could see all their recent gains removed if the central bank resumes with the current Quantitative Tightening (QT) policies. Hayes said:
"If the Fed does not follow through with a pivot, or multiple Fed governors talk down any expectation of a pivot even after “good” CPI prints, Bitcoin will likely crash back down towards previous lows."
The former BitMex boss said he believes the Fed will "move to print money and avert another financial collapse." And if this happens, it would mark the local bottom for risk assets such as Bitcoin.
It is worth noting that Fed Chair Jerome Powell has insisted that rates would remain elevated until inflation reaches that goal, suggesting that a pivot is not likely simply because CPI is
Read more on cryptonews.com
