- The founder and former CEO of the BitMEX exchange believes that altcoins could suffer further losses if the cryptocurrency market collapses.
- The main barrier to the market, according to Hayes, is the involvement of the Federal Reserve.
Former BitMEX CEO Arthur Hayes believes that a price reduction in the cryptocurrency market will seriously affect other altcoins more than Bitcoin (BTC) or even Ethereum (ETH). In a Medium post, Hayes noted that altcoins could fall as high as 90 percent from their current trading positions.
If I think Bitcoin could trade below $ 30,000 and Ether below $ 2,000 in a three to six month time horizon, I will get rid of all my sh * tcoins … These shitcoins could go down between 75% and 90% in real risk-off environment for cryptocurrencies.
In addition, the beleaguered cryptocurrency luminary expressed doubts about the so-called ‘diamond hands’ in cryptocurrencies. These are people or entities who hold assets and expect to be valued despite the risks and potential losses. He argues that if market conditions change, institutional investors will not hesitate to divest their cryptocurrencies to cut losses.
They do not believe or maintain any allegiance to Lord Satoshi.
The encryption market and the Fed
This bleak future is possible as the U.S. Federal Reserve is laying its eyes on the cryptocurrency industry, Hayes said. Nutrition participation, he says, is the main barrier to the digital asset market. He stressed the positive correlation between the growth of the nutrition balance sheet and the price of Bitcoin. And now that the central bank is steadily declining bond purchases, the “money printer” case is losing ground. Concerns about the «money printer» have increased due to the relentless printing of the dollar by the US government and the resulting inflation.
If M2 is going to hit 0% – and maybe even negative – at any time, the natural conclusion is that Bitcoin is likely to fall (in the absence of any asymptotic growth in the number of users or transactions processed over the network) as well. much.
M2, according to Investopedia, is an indicator of future money supply and inflation.
Now central banks around the world are inclined to fight the current inflation, which Hayes calls «Public Enemy # 1.»
“Villages have grown as the cost of meat, vegetables, taxi ride, rents and other essentials is rising faster than their salary,” he wrote.
And now that?
Fed’s sharp focus on cryptocurrencies could be lowered if the consumer price index (CPI) falls below 2%, Hayes says. He warns, however, that this is unlikely to happen. The CPI rose 6.8 percent in the year ended November 2021, according to the U.S. Bureau of Labor Statistics.
Hayes also believes that the central bank could reverse its activities if inflation falls on the priority list ahead of the November 2022 US general election.
Currently, red bars still dominate the cryptocurrency market after a wide price correction. Current protests in Kazakhstan also played a role in this decline.