‘$100 Billion Per Month’—Legendary Trader Makes Surprising Crypto U-Turn After Huge Price Swings for Bitcoin, Ethereum, BNB, XRP, Cardano, Dogecoin, Polygon and Solana
BitcoinBTC, ethereum and other major cryptocurrencies have seen a decline this week as fears swirl around a possible shock ban in the US.
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The Bitcoin price, down around 50% from this time last year, is up 30% since the start of 2023, labeled a “year of opportunity”. EthereumETH and other top ten cryptocurrencies BNBBNB, XRPXRP, cardano, dogecoin, polygon and solana have also rallied, with BXRPinance CEO Changpeng “CZ” Zhao issuing an “existential” warning.
Now, as the US Federal Reserve wreaks havoc with the bitcoin price and the crypto market, legendary trader and former BitMex CEO Arthur Hayes has changed his tune on bitcoin’s short-term fortunes – revealing that he will make a bitcoin distribution “in the coming days .”
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“I will deploy in the coming days,” Hayes wrote in a blog post, adding that “if bitcoin and ethereum continue to rally, there will definitely be a ‘rally in minor cryptocurrencies’ over the next few months.”
Last month, Hayes warned that “risky assets” such as bitcoin, ethereum and tech stocks could “go up in smoke” in 2023 due to a “catastrophic global financial meltdown.”
Last year, the Fed began raising interest rates and shrinking its balance sheet in an attempt to curb skyrocketing inflation. Recent consumer price data has led some to bet that the Fed has already won the war on inflation and will swing to a more dovish stance later this year.
Despite the Fed removing “$100 billion per month [from its balance sheet] which is negative for risk,” Hayes pointed to the Treasury’s $500 billion “checking account” potentially canceling out Fed tightening.
“The Treasury will draw down the Treasury General Account (TGA) to zero due to the debt ceiling being hit,” Hayes wrote, predicting that it is inevitable that Congress will vote to raise the debt ceiling by the summer to prevent a US debt default.
“The TGA will be exhausted sometime in the middle of the year. Immediately after the exhaustion, there will be a political circus in the US around raising the debt limit,” Hayes wrote. “Given that the Western-led fiat financial system would collapse overnight if the US government decided to forego raising the debt ceiling and instead default on the assets that underpin said system, it’s safe to assume that the debt ceiling will be raised.”
However, traders should “get out of the market” when “TGA hits zero,” Hayes added.
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Meanwhile, bitcoin, ethereum and crypto prices have declined after analyzing the week’s economic headlines.
“Traders and investors continued to reposition themselves after last Friday’s strong employment data, and Powell’s non-committal comments at the Economic Club event on Tuesday did nothing to change the trend,” market watcher Noelle Acheson wrote in a blog post.
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