The co-founder of BitMEX, Arthur Hayes, has predicted that Bitcoin (BTC) could experience more downsides, falling toward $50,000 before a rally in late September.
BitMEX Co-founder Arthur Hayes Says Bitcoin May Touch $50,000 In September
In a blog post on September 3, Arthur Hayes, BitMEX co-founder, and Maelstrom’s CIO revealed that the price of Bitcoin (BTC), the largest cryptocurrency by market cap, could continue to drop to as low as $50,000 before a bullish rally toward the end of September.
This announcement is opposed to Hayes’ previous prediction that the BTC market would be bullish in September. On Tuesday, Hayes wrote that his previous prediction was incorrect as BTC would continue its bearish move.
Hayes gave two possible scenarios to back his new predictions.
First, he mentioned that Bitcoin is so sensitive to changes in dollar liquidity and if the Feds does not cut interest rates before the September 18 meeting, Bitcoin’s price may suffer.
He noted that the price of BTC soared to about $64,000 due to the effects of the Powell Payroll Pivot.
However, the price of BTC plunged quickly by 10% soon after. Hayes explained that the drop in value was because of the shifts in the Fed’s Reverse Repo Program (RRP) balances.
He emphasized that if the RRP is high, it will effectively remove liquidity from the market and hold it inactive on the Fed’s balance sheet to prevent reinvesting or leveraging.
According to Hayes, as soon as the RRP began to rise to about $120B, “Bitcoin swooned.”
Hayes anticipates the RRP balances to continue to rise, causing the price of Bitcoin to “slowly leak lower towards $50,000.”
Secondly, in a smart move to ensure that Kamala Harris wins the election, the US Treasury Secretary, Janet Yellen, may likely run down the Treasury General Account (TGA) into the market.
The Fed Chair, Jerome Powell, may also be likely instructed to “cease quantitative tightening and start quantitative easing.”
All these moves would lead to an emergency money supply in the market, posing a risk to BTC.
Hayes added that “if this scenario occurs,” he expects Bitcoin’s bullish move to “begin in late September.” But before the bullishness, the price of BTC will “continue to” drop, and other cryptocurrencies could plunge deeper.
At the time of writing, Bitcoin was trading at $56,731 per coin, according to Tradingview.
Arthur Hayes Would Buy The Dip
Hayes added that should the prices of Bitcoin and other altcoins fall as predicted, he would be busy buying the dip. He mentioned that he would buy “solid shitcoins” with real utility and value.
Although Hayes did not specify which altcoin he would buy, he may consider any of the altcoins he backed in the past, like PENDLE and Etherna.
