- Arthur Hayes foresees Bitcoin reaching $100,000 by year-end.
- The yen “carry trade” influences crypto markets amidst economic shifts.
- Hayes recommended evaluating underperforming assets and reallocating capital to more promising opportunities.
In a recent interview, BitMEX cofounder, Arthur Hayes, shared his insights on the cryptocurrency market, addressing global economic changes and the U.S. election uncertainties. Despite the political situation, Hayes remained optimistic on Bitcoin’s long-term potential, predicting it could reach $100,000 by the end of the year.
Hayes emphasized the influence of the unwinding “yen carry trade” on global markets and its significant impact on crypto. The carry trade involves borrowing yen at low interest rates to invest in higher-yielding assets, including cryptocurrencies. This trade has led to increased volatility and selling pressure in the crypto market. Hayes explained, “This borrowing of Yen has filtered into the crypto ecosystem… you sell what you can, not what you want.”
He further elaborated on how the recent yen carry trade, spurred by the Bank of Japan’s policy shift, has affected the financial ecosystem globally. Hayes noted that as the yen strengthens, there has been a correlation-driven sell-off in risk assets, including cryptocurrencies. This phenomenon has been compounded by investors needing to liquidate liquid assets like crypto during market turbulence.
Turning to altcoins, Hayes stayed bullish on Bitcoin-native ordinals, predicting that the crypto wealth effect will drive demand for digital artifacts. He believes that as Bitcoin’s value increases, Bitcoiners will seek to spend their wealth on cultural experiences and digital artifacts that resonate with them. Ordinals, which are Bitcoin-native digital artifacts, differ from NFTs by being directly linked to the Bitcoin blockchain.
Also, when asked about investing in cryptocurrency, Hayes advised investors to focus on protocols with strong revenue models and low price-to-earnings ratios while cautioning against leveraged trading unless actively monitored. He recommended evaluating underperforming assets and reallocating capital to more promising opportunities. Hayes stressed that strategic investments could significantly outperform, even if it means taking losses on previous investments.
On the U.S. presidential election and the impact on global finance and crypto industry, he projected that Vice President Kamala Harris is a slight favorite but stressed the need for political engagement from the crypto community. Hayes urged crypto voters to demand tangible actions from politicians before offering support, emphasizing, “I want you to do something for me before I give you my vote in November.”
Hayes highlighted the importance of the U.S. government maintaining a strong stock market to secure capital gains taxes and avert a financial crisis during an election year. He believes that both political parties will likely contribute to increased fiat liquidity through fiscal policies, ultimately benefiting cryptocurrencies in the long run.
Hayes remained confident in the potential for strategic investments and political coordination to shape the future of cryptocurrencies. He predicts that Bitcoin will reach $100,000 and Ethereum $5,000 by the end of the year, driven by increased liquidity and market dynamics.
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