Despite the recent cryptocurrency market crash, BitMEX founder Arthur Hayes wrote today that recent changes in US currency policy, equivalent to secret printing of money, will increase huge amounts of US dollar liquidity in the financial system every month, causing the currency market to hit bottom and slowly recover.
(Previous summary:
Arthur Hayes: US Treasury will inject $1.4 trillion liquidity into the market in May, pushing for the return of the crypto bull market.)
(Supplementary background:
Arthur Hayes’ latest article: Printing money will accelerate, and I’m increasing my chips… the crazy bull market is not over yet.)
BitMEX founder Arthur Hayes wrote today (3rd) that there are several reasons for the recent market crash, including: the US tax season, market panic about the actions of the Federal Reserve, triggering “sell the news” after the halving of Bitcoin, and the slowdown in the management of assets of the US Bitcoin spot ETF… and other factors.
Changes in US currency policy affect the currency market
However, Arthur Hayes said that the recent changes in US currency policy will soon help boost the currency market.
First, at this week’s interest rate decision meeting, the Federal Reserve decided to slow down the monthly tapering rate from $95 billion to $60 billion, which is essentially an increase of $35 billion in liquidity per month.
The US Treasury revealed in its latest quarterly refunding report that in order to meet the funding needs by the end of May, it will issue short-term government bonds with 4-week, 6-week, and 8-week maturities, which is expected to add additional US dollar liquidity to the market.
In addition, Arthur Hayes pointed out that the US is currently experiencing fiscal pains, and the statement by US Treasury Secretary Yellen is more important than any other currency official’s statement. The US Treasury publishes quarterly refunding reports to guide the market, indicating the quantity and types of bonds the government needs to issue for funding.
Arthur Hayes also mentioned that the recent bankruptcy of Republic First Bank, a small US bank, means that the US authorities have effectively added $6.7 trillion in contingent liabilities to the entire banking system through the Federal Deposit Insurance Corporation (FDIC) guaranteeing all deposits of the US banking system to avoid affecting the election.
Expecting the currency market to hit bottom and recover
Therefore, Arthur Hayes concluded that the recent policy statements by the Federal Reserve and the US Treasury, like secret printing of money, will gradually reduce the negative changes in currency market prices from now on. He expects the currency market to hit bottom, oscillate, and slowly climb.
As for investments, Arthur Hayes said that the recent wave of selling provided him with excellent opportunities to unlock USDe and use these synthetic dollars to buy high-beta altcoins. He will buy Solana and dog-related currencies for short-term trading.
Regarding long-term positions in altcoins, Arthur Hayes said he will increase his holdings of Pendle and look for other discounted currencies. In the remaining time in May, he will increase his exposure and set stop-loss points, waiting for the market to realize the inflationary effects of recent US currency policies.
Arthur Hayes predicts that Bitcoin will rebound to above $60,000, and then consolidate between $60,000 and $70,000 until August.
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