09 Apr

Co-founder of BitMEX Arthur Hayes has predicted a huge crypto asset firesale that will be fueled by the impending Bitcoin
BTC/USD halving and the tactics of the Federal Reserve.

Hayes forecasts a period of high volatility for cryptocurrencies in the second part of April. According to him, the Federal Reserve, Treasury, and Bitcoin halving might all contribute to a big crypto asset firesale that could knock the market for many weeks. Hayes stated this on April 8 in a blog post.

Hayes proposed that although the halving of Bitcoin would increase prices in the middle term, it might also have a negative effect on prices of cryptocurrencies both before and right after the event. The halving, in his opinion, is scheduled for a period when "dollar liquidity is tighter than usual."

Hayes stated, "I think the price of Bitcoin and cryptocurrencies in general will drop around the halving. It will fuel a ferocious firesale of crypto assets."

 Hayes also pointed out that the Fed's Quantitative Tightening (QT) program, the removal of liquidity from U.S. tax payments, and the underutilization of the Treasury's General Account (TGA) might make the second half of April a "precarious period for risky assets."

Hayes believes the money supply tightening will slow down after the Fed's meeting on May 1 and that the Treasury would inject “probably an extra $1 trillion of liquidity into the system, which will pump markets.” 

Hayes' projections are made at a time when the price of Bitcoin (BTC) is currently trading at $71,359, having increased by over 61.55% year to date. Hayes has predicted that Bitcoin might reach a $1 million price. Previously, he had advised prudence before labeling all meme coins as "stupid."

Market analysts are predicting a possible rebound that may see the value of Bitcoin rocket to new heights despite the anticipated instability. It is unclear, though, how the Federal Reserve's policies and the impending halving of Bitcoin would affect the cryptocurrency market.

April 2024, Cryptoniteuae 

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