BitMEX Founder Arthur Hayes Says Ethereum Will ‘Definitely’ Outperform BTC, Outlines Danger Zone For Bitcoin Bulls
BitMEX co-founder Arthur Hayes highlights a key support level that should worry traders and investors who have placed long positions on Bitcoin (BTC).
In a new blog post, Hayes says Bitcoin bulls should be “concerned” about the $17,500 price level, an area that marks the current bear market for BTC.
The former BitMEX chief says Bitcoin’s performance will likely be determined by the US dollar liquidity index, a metric that tracks the amount of US dollars in the system through the size of the Fed’s balance sheet, the Fed’s reverse repo facility and the balance sheet of the US Treasury. general account at the New York Fed.
“Looking at the swings of the USD Liquidity Index and its momentum, the Bitcoin level yearning to be concerned is $17,500. The most likely action is a re-test of the low. Whether it holds the line or not is entirely dependent of the trajectory of the USD Liquidity Index impulse.”
According to Hayes, the Fed’s commitment to reducing its balance sheet and the US Treasury Secretary’s propensity to issue more debt to fund the government are taking liquidity from the system, which he notes does not bode well for BTC.
At the time of writing, Bitcoin is changing hands for $19,164.
As for Ethereum (ETH), Hayes says the second largest crypto asset by market capitalization is likely to surpass Bitcoin.
However, the crypto capitalist says Ethereum is unlikely to hit a price of at least $10,000, as he had predicted earlier this year if monetary tightening continues in the US.
“I remain confident that the structural reduction in the supply of ETH will definitely lead to an outperformance against Bitcoin – but if the Fed and Treasury continue with their USD liquidity reduction plans, I have little confidence in ETH’s ability to reach Five Ducking Digits with the end of the year.”
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