BitMEX founder and crypto veteran Arthur Hayes is detailing his outlook for Bitcoin (BTC) amid a market downturn.
In a new blog post, Hayes says that Bitcoin and other crypto assets could benefit from the interest income earned on US government paper.
The BitMEX co-founder says that while forecasts are suggesting a drastic drop, he sees Bitcoin falling mildly by less than 5% from the current level.
“I also believe that at some point, more investors will do the maths and realize that the Fed and US Treasury combined are handing out billions per month to wealthy savers. This money has to go somewhere, and some of it will flow into tech stocks and crypto. As apocalyptic as the mainstream financial media might sound vis-a-vis a sharp correction in crypto prices, there is a lot of cash that needs a home in finite-supply financial assets like crypto.
While some think we are going to break back below $20,000 on Bitcoin, I tend to think we spend the beginning of Q3 chopping around $25,000. The ability for crypto to weather the storm will be directly related to the amount of interest income looking for a new home.”
Bitcoin is trading at $26,072 at time of writing.
The crypto capitalist further says that the Federal Reserve’s moves to address liquidity pressures facing US banks will have bullish implications for risk assets like crypto and tech stocks.
“One of Bitcoin’s value propositions is that it is the antidote for a broken, corrupt and parasitic fiat banking system. Therefore, as the banking system falters, Bitcoin’s value proposition grows stronger.
Also, Bitcoin benefits from increased fiat liquidity. Rich people don’t need real stuff; they need financial assets so they can effortlessly consume to their heart’s desire. Bitcoin has a finite supply, and therefore as the denominator of fiat toilet paper grows, so will Bitcoin’s value in fiat currency terms. This is why Bitcoin is up 18% since March.
As long as the Fed is committed to its current path, tech stocks and crypto will continue rising. Apart from big tech and crypto, nothing else returns more than just parking your money with the Fed earning close to 6%.”
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Original Post: BitMEX Founder Arthur Hayes Details Path Forward for Bitcoin Amid an ‘Apocalyptic’ Mood – Here’s His Outlook