Arthur Hayes predicts Bitcoin’s worst-case scenario: a crash to $50,000

Bitcoin fell below $56,000 on Wednesday, continuing its downtrend.

In a worst-case scenario, the world’s largest crypto asset could gradually decline to $50,000, according to Arthur Hayes, co-founder and former CEO of BitMEX.

Potential for Altcoin Carnage

In his latest article titled “Boom Times… Delayed,” Hayes predicted that altcoins could experience even steeper losses. Their bearish outlook is rooted in the broader macroeconomic environment, particularly the actions of the Federal Reserve and the dynamics of the US Treasury market.

He noted that while the Fed has held off on rate hikes starting at its August 2024 Jackson Hole meeting, the bond market’s reaction has been more pronounced, with 10-year Treasury yields rising towards 5%. This rise in yields, fueled by concerns about inflation and government spending, has already led to a 10% correction in the stock market and raised fears of regional bank failures.

Despite this bearish outlook, Hayes remains long with BTC and certain reliable altcoins, although he avoids leveraged positions. He predicts that a significant intervention, likely in the form of liquidity injections, could begin at the end of September this year, which can stabilize the markets and potentially increase the price of bitcoin.

For now, Hayes said he’s focused on growing his positions in solid “shitcoin projects,” aka altcoins at discounted prices, though he acknowledges that short-term market movements are unpredictable. His long-term thesis remains that central banks will eventually turn to money printing to deal with economic challenges, which could ultimately bode well for bitcoin and other risk assets.

Compelling opportunity

Current market conditions remain uncertain and September has proven to be a bearish month, not just for crypto, but for all asset classes. But QCP Capital said October has the strongest bullish seasonality, with Bitcoin posting positive returns and an average gain of 22.9% in 8 of the last 9.

This pattern could be driving continued call buying in the volatility market. If this seasonal trend holds true again this year, the trading firm suggests that accumulating during the September dip and taking profits in October or towards the end of the year could be a strategic move.

“September offers a compelling opportunity to accumulate a BTC spot ahead of a potential rally in October and the upcoming US election.”

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