BitMEX co-founder Arthur Hayes predicts that the upcoming Bitcoin halving, combined with the actions of the Federal Reserve and Treasury, will lead to a significant drop in the crypto market. In a blog post, Hayes stated that while the halving may boost prices in the medium term, there could be negative effects before and after the event. He believes that when the majority of market participants anticipate a positive outcome, the opposite usually happens. Hayes also discussed the impact of US Federal Reserve and Treasury policies on the market, suggesting that the timing of the halving coincides with a period of tighter dollar liquidity. He mentioned that the second half of April could be precarious for risky assets due to tax payments reducing liquidity, the Fed implementing Quantitative Tightening, and the Treasury’s General Account yet to be utilized. After May 1, Hayes expects the Fed to reduce the pace of money supply tightening and the Treasury to release additional liquidity into the system, which he believes will pump markets. Due to these factors, he has decided to abstain from trading until May. Bitcoin has seen a significant increase this year, climbing from around $42,200 to $71,170. The Crypto Fear & Greed Index, which measures market sentiment, has also risen during this period, consistently staying in the “Greed” marker. Hayes concluded that if his liquidity scenarios prove true, he will have more confidence in investing in various assets. However, he prioritizes avoiding losses over maximizing gains.
Arthur Hayes predicts that the upcoming BTC halving will intensify the selling frenzy of crypto assets.