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In a interview with Tom Bilyeu, Arthur Hayes, co-founder and former CEO of BitMEX, shared an insightful analysis of the future dynamics that he believes will determine the Bitcoin price. At the heart of Hayes’ argument is a complex interplay of global financial mechanisms.
Bitcoin price could reach $750,000
Hayes began preparing for Bitcoin’s short-term move, saying, “My working model is that we will continue to chop around $25,000 to $30,000 this year.” This prediction is based on the expectation of impending financial disruptions, and Hayes alluded to the consequences of negative real interest rates.
When nominal interest rates, driven by government policy, fluctuate between 6% and 10%, he expects a wave of diversification in investment strategies. Cryptocurrencies, especially Bitcoin, will benefit significantly from such a shift. “If we face some kind of financial turmoil and people realize that real interest rates are negative, people will start buying other things in the market if governments are growing nominally at 10%, 5%, 6%, even though that is high . Crypto is one of those things,” Hayes noted.
Hayes elaborated on the dynamics and extrapolated his forecast to 2024. He said: “Either we face a financial crisis where interest rates fall to zero, or we experience a slower increase in interest rates relative to government spending.” In either scenario, Hayes expects a bullish outcome for Bitcoin, with it reaching the $70,000 mark by the end of 2024.
The main factors, he said, would be the halving of Bitcoin, an algorithmic reduction in Bitcoin rewards that traditionally influence its price, and possible launches of Exchange-Traded Funds (ETFs) by major asset management giants in strategic global financial centers, including the US. , Europe, China (via Hong Kong).
The longer-term prediction, however, is where Hayes’ vision becomes even more expansive. He expressed: “This is where the real fun begins. In my mental model, we could go somewhere between $750,000 and $1,000,000 per Bitcoin in the 2026 time frame. Whatever the number is, it will be a round number, just like Bitcoin reached $69,999. Then it goes down and crashes. 75% or 80%, it doesn’t matter.”
Hayes is confident such an evolution will occur amid an unprecedented financial boom. Moreover, Hayes’ analysis is not limited to Bitcoin. He draws parallels and suggests that this monumental financial growth will spread to other key assets. Indicators such as the NASDAQ and S&P will also show record-breaking performance, he suggests.
“I think this will be the biggest financial market boom we’ve ever seen in human history. Bitcoin will be at a ridiculous price, Nasdaq will be at a ridiculous price, S&P will be at a ridiculous price. Choose your stock sector. […] Not just in crypto,” predicts Hayes.
Money printer will soon go “Brrrr”?
On a separate note, Hayes expressed his thoughts on the broader macroeconomic environment, specifically pointing to the US Federal Reserve’s monetary policy in a series of tweets on Wednesday. He put forward the belief that if the Fed were to return to its aggressive money printing strategies, it could become a major catalyst for Bitcoin’s upward trajectory.
One of Hayes’ main focuses has been on an emerging phenomenon in the bond market called the “bear steeper.” This scenario, in which long-term bond yields rise faster than short-term yields, often serves as a bearish indicator for stocks and riskier assets. Delving into the complexity of this pattern, Hayes noted in one of his tweets: “Why do I love these markets now when yields are screaming higher? Bank models have no idea that a bear stealer will occur.”
Hayes elaborated on the possible outcomes of a rapid evolution of bear stealers and highlighted the risks. “The faster this bear steepens, the faster someone gets into trouble, the faster everyone realizes there is no way out other than printing money to save the government bond markets,” he noted, signaling a possible domino effect suggested that Bitcoin, could drive cryptocurrencies. and all financial markets are rising.
At the time of writing, BTC was trading at $27,619.
Featured image from South China Morning Post, chart from TradingView.com