Arthur Hayes Weighs in on Why Bitcoin Failed to Reach $70,000
BitMEX co-founder Arthur Hayes said that the recent decision by the United States Federal Reserve (Fed) to lower interest rates is expected to trigger a rapid surge in Bitcoin’s price, potentially propelling it toward the $70,000 mark.
Hayes had previously predicted that Bitcoin would reach this level after March, but the Fed had increased interest rates three times between March and the current period.
- Bitcoin’s failure to reach the previously predicted $70,000 level is due to a focus on the nominal Federal Reserve (Fed) interest rate rather than the real interest rate when compared to the United States’ high nominal GDP growth.
- Hayes noted that Bitcoin’s price performance is influenced by the market’s perception of real interest rates, which take into account inflation and other economic factors.
- In his latest blog post, ‘Are we there yet,’ Hayes explained that the general notion suggests that when interest rates rise, the prices of risky financial assets like Bitcoin should fall.
- Reiterating his comments at Korea Blockchain Week, Hayes pointed out that investors’ search for positive real yields kickstarted a Bitcoin bull market on March 10th, following which the flagship asset is up by close to 29%.
- Even as the price tested $30,000 and failed multiple times, Bitcoin is still trading well above its pre-BTFP bailout level of $20,000, Hayes added.
- The BitMEX founder further said that unconventional monetary policies, rising government debt, and the changing economic landscape continue to contribute to Bitcoin’s appeal.
“Escape only comes through buying Bitcoin and withdrawing it to your own wallet, where you hold the private keys. It is logical to assume the market will tire of handing profit to the government when there are financial escape hatches like Bitcoin readily available.”
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