- Advertisement -
Arthur Hayes, the co-founder of crypto derivatives platform BitMEX and Bitcoin pioneer, has turned in a interview with Scott Melker.
Despite the threat of an impending recession in the US, Hayes believes Bitcoin is in a bottoming phase. According to him, the origin of the boom-and-bust cycle is unbridled monetary policy.
“If we take a step back and look at why BTC has risen so high because [… ] the world’s largest economy has printed the most money they’ve ever done. It is clear that a lot of money has been flowing into crypto,” said BitMEX founder.
The deductible must now be reversed. Notably, it also contributed to the “behavior of Sam Bankman-Fried, FTX, Kyle, Zhu and all centralized money platforms. All bankrupt and insolvent.”
Bitcoin bottom is in
Looking ahead, this is the most important bottom indicator for Hayes, as “virtually everyone who could go bust has gone bust”.
Remarkably, the collapsed entities sold Bitcoin and Ethereum first, indicating the health of the market. In contrast, “dog and shitcoins” still remain on their balance sheets because they are super illiquid, Hayes noted.
He added: “If you look at Alameda’s balance sheet, there is no BTC there. They sold Bitcoin when they went bankrupt. The shitcoins are over.”
That’s another reason why BTC will ring the bell for the end of the bear market, while some altcoins will remain depressed, Hayes claimed:
[Bitcoin is] the purest and most liquid asset, and therefore it will also divert us from the bottom. And of course the shitcoins will follow. But there are many bags in the hands of bankrupt companies that they have to liquidate.
But at least for Bitcoin, I am confident that the biggest, most irresponsible entities have sold all Bitcoins to diamond hands.
In the addendum, the BitMEX founder went on to say that he cannot prove that all of the BTC from these failed entities was sold during the crashes, but it seems like it.
In his recent blog afterHayes added that he currently sees no reason why people shouldn’t hold Bitcoin unless they have an “urgent need for fiat money.”
The real test for BTC will come in 2024/2025
Looking further into the future, the BitMEX founder believes that BTC will recover next year as the US Treasury and bond market will become dysfunctional sometime in 2023 due to the Fed’s tighter monetary policy.
At that point, Hayes expects the Fed to start up the money printer. Then Bitcoin and all other risk assets will skyrocket. However, Bitcoin will serve as an indicator and will pre-decouple from the S&P500.
In addition, the BitMEX founder does not expect the real test for Bitcoin, a recessionuntil 2024 or 2025 when he predictions a “generational collapse” will occur.
“Hopefully it’s better than the 1930s, but depressed. And then the question is, can Bitcoin outperform 10-year government bonds and really high inflation?” Hayes said.
Until then, the dollar and BTC markets will be correlated. Or Bitcoin really one inflation hedge and will show any use then remains to be seen. “That’s the real test,” Hayes concluded.
At the time of writing, BTC registered a small loss of 1.1% over the past 24 hours. The price was $16,973.