Watch out for turbulence! Arthur Hayesthe former boss of the crypto-stock market BitMEXnow regularly publishes his points of view (of course rather bullish) in the sector of Bitcoin (BTC) and cryptocurrencies. Last month, he rewarded us witha prediction of a bitcoin at 1 million dollars (just that !). But this time, Arthur Hayes prefers to talk about potential risks for the cryptosphere, which could arrive next spring, in order to better anticipate them.
A crypto market correction next March?
The small world of crypto-assets is for the moment expectantly of approval by the Securities and Exchange Commission (SEC) of a whole first spot Bitcoin ETF. But whether this validation arrives in the coming days of this month of January, or a little later in March, Arthur Hayes warns us that the crypto market might have a hangover after the euphoria of such an announcement (if it actually happens! With the SEC, you never know).
From concerns by Arthur Hayes include the key rates of the Federal Reserve (the Fed) the United States. In fact, after a crazy increase in these rates – carried out to urgently contain inflation galloping (which had exceeded 9% to USA) -, the Fed calmed down these last months. It has in fact left its key rates unchanged. The rise is over?
There March 2024 meeting of the Fed will be one of the determining factors for the crypto market, according to Arthur Hayes. Because the consensus is based on a first rate cut, as reported by the former CEO of BitMEX. A drop inat least 0.25% “. A first since… March 2021 (3 years then!).
Bitcoin strongly impacted by the actions of the Fed and the US Treasury?
In addition to this, two others Important appointments will also arrive in March. They concern the decisions that the Fed will make on the balance of its repo scheme (Reverse Repo ProgramOr RRP) on the one hand, and on the renewal (or not) of its bank term financing program (Bank Term Funding ProgramOr BTFP) on the other hand. THE US Treasury by Janet Yellen will obviously have his say on these decisions.
If the planets align unfavorablythis could cause significant financial troubles. Bitcoin and the crypto-asset market could also be seriously affected affectedaccording to Arthur Hayes, but only initially:
“At first, Bitcoin will see a sharp decline with the overall financial markets, but it will rebound before the Fed meeting [sur ses taux directeurs]. This is explained by the fact that Bitcoin is the only strong currency (hard currency) neutral reserve which is not a liability of the banking system, and which is exchanged throughout the world. Bitcoin knows that the Fed ALWAYS responds with an injection of liquidity when things go bad. (…) This is why Bitcoin will increase sharply before and during the possible capitulation of the Fed to restart money printing (money printing). »
The important clue to follow to anticipate a decision by the Federal Reserve on its key rates, is of course that of inflation in the USA: the Consumer Price Index (consumer price index, or CPI). If it continues, even if only slightly, down : there is a greater chance that the Fed will actually start to reduce your rates.