BitMEX co-founder Arthur Hayes predicts that the price of Bitcoin could fall as low as $30,000 by June due to its correlation with tech stocks and an impending (he believes) drop in the NASDAQ.
What happened: In a blog post published on Medium, Hayes outlined why he’s bearish on crypto for the short term, citing “rising nominal interest rates, worsening global fiat liquidity conditions, and falling economic growth” as primary factors that will drive prices down.
- Using a series of graphs, Hayes demonstrated the relationship between the NASDAQ and apex cryptocurrencies bitcoin and ether, arguing that rising inflation will force central banks to “tighten monetary policy” and raise interest rates.
- Hayes forecasts that US tech stocks will slump and drag crypto prices down with them, “an inconvenient truth” he claims most experts are willing to “ignore.” He predicts bitcoin could fall as low as $30,000 and ether to $2,500.
- He also cites the Russian invasion of Ukraine as a factor downgrading market stability and growth, saying that “global growth will decline on higher commodity prices driven by the continuation and possible escalation of the Russia / Ukraine war.”
Even though he claims that we’re on the road to a “calamitous outcome,” he is still bullish on crypto in the long term, but taking a bearish position for the short term and buying “crash June 2022 puts on both Bitcoin and Ether.”
Why it matters: While Hayes is clear that all of these ideas are purely speculative and come from his “gut feeling,” he might be on to something.
- On Monday, the crypto economy saw an almost 5% loss across the board, causing it to dip below its $2 trillion market cap. As of this writing, bitcoin sits at US$40,703 after a 4.8% loss over 24 hours, per Coin Market Cap.
- “U.S. inflation likely accelerated to 8.4% in March, the fastest pace since early 1982, economists surveyed ahead of data due Tuesday predict. The Federal Reserve may need to hike interest rates above 4%, Goldman Sachs Group Inc. Chief Economist Jan Hatzius told Bloomberg.
But Hayes sees this downturn as part of a larger cycle, where crypto will reign supreme as they are “the only free markets left globally.”