- Arthur Hayes told in his recent post that the supply of cryptocurrencies from CELs, BTC miners, and ordinary speculators have ended.
- He added that there are possibilities for the rise of risk assets and cryptocurrencies in 2023.
- An analysis of the fall of BTC price starting from its cause to detailing the possibilities of its gain in the future had been narrated in the blog.
Arthur Hayes, the American banker, Bitcoin advocate, and a fintech pioneer, in his recent post, titled “PEMDAS”, mentioned that the supply of bitcoins from centralized lending firms, bitcoin mining operations, and ordinary speculators has come to an end. He also pointed out the possibilities of the risk assets and cryptocurrencies rising in the next year.
Interestingly, PEMDAS is an abbreviation for Parentheses, Exponents, Multiplication, Division, Addition, and Subtraction, which is actually the order of operations in solving equations. He referred to the word to show that an order of evaluation is necessary for resolving problems, as he started explaining the cause of the crypto fall in the same sequence.
Initially, he narrated the cause of the Centralized Lending Firms (CEL) to fall to bankruptcy, usually because, “they either lent money to entities that can’t pay them back, or they have duration mismatches in their lending books.”
Hayes highlighted that when things get worse with the bankruptcy, the CELs have the tendency to sell Bitcoin, as “it’s the asset most used to collateralize loans and it’s the most liquid cryptocurrency”- an attempt to avoid bankruptcy. Thus, before CEL falls, there had been sudden declines in the BTC price.
Significantly, the chart shows how the trading volume spiked during the two credit crashes of 2022 when some of the once-leading crypto firms crashed.
In addition, the miners had been net selling bitcoins in large amounts during the crunches, “to stay current on their bag fiat debt loans”. Towards the end of the blog, Hayes cited that he believe that “the US Treasury market will become dysfunctional at some point in 2023 due to the Fed’s tightening monetary policies” when the Fed would turn the printer bank on.
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