Arthur Hayes, co-founder and former CEO of BitMEX, recently published an essay on Substack titled “Boom Times … Delayed,” where he discusses why upcoming Federal Reserve rate cuts might not rejuvenate the crypto markets as expected. Hayes questions the common investor reflex to “buy the dip” based on historical rate cuts due to changes in the economic climate post-COVID.
Hayes elaborates on how post-COVID fiscal policies have led to inflation, altering the effectiveness of monetary interventions. He critiques high government spending and the Federal Reserve’s reactionary measures to control inflation. Hayes highlights Bitcoin's sensitivity to dollar liquidity conditions and suggests a possible decline in Bitcoin prices towards $50,000 if rate cuts are delayed past September.
Despite predicting short-term bearishness, Hayes remains optimistic about Bitcoin's long-term prospects. He speculates on potential interventions by US Treasury Secretary Janet Yellen to stimulate markets ahead of the US presidential election. Hayes forecasts that significant liquidity injections could positively impact Bitcoin and other risk assets, suggesting possible recovery in late September.
Overall, Hayes maintains his long-term bullish stance on Bitcoin and cryptocurrencies, planning to invest in solid projects at discounted prices. At the time of publication, Bitcoin was trading at $56,615.
