Arthur Hayes Says Crypto Assets Face 'Sell-Off' Amid Bitcoin Halving as Federal Reserve Uses 'Bag of Tricks' to Bail Out Banks

BitMEX co-founder Arthur Hayes said bitcoin and cryptocurrency prices may fall the moment bitcoin halving, as US policymakers use a “bag of tricks” to bail out the financial system.

The April 20 halving will also coincide with a period of tight dollar liquidity with tax payments due from April 15 to May 1, he said in a blog post.

“Given that the halving comes at a time when dollar liquidity is tighter than usual, it will add fuel to a furious sell-off in crypto assets,” he said. “April will experience extreme weakness in risk asset markets.”

<blockquote class="twitter-tweet” data-width=”550″ data-dnt=”true” wp_automatic_readability=”5.6968085106383″>

“Heatwave” is an essay on why I am bearish despite the recent bullish movement in twitter.com/hashtag/crypto?src=hash&ref_src=twsrc%5Etfw”>#crypto markets.https://t.co/gZ8Vl1uC04 pic.twitter.com/fH6docB499

—Arthur Hayes (@CryptoHayes) twitter.com/CryptoHayes/status/1777524500872966230?ref_src=twsrc%5Etfw”>April 9, 2024

bitcoin is back above $70,000 as the market anticipates the halving, which is less than two weeks away. He crypto/fear-and-greed-index/” target=”_blank” rel=”noopener”>bitcoin Fear and Greed Index is at 80, which shows “extreme greed.”

Hayes said the narrative that bitcoin's halving is a bullish catalyst is “well entrenched,” but added that past trends show that when the market expects a certain outcome, the opposite tends to happen.

Fed Policies Will Drive Long-Term Gains

The Federal Reserve is surreptitiously printing money “to rescue the financial system” and that could lead to gains for cryptocurrencies, gold and stocks in the long term, Hayes said.

While some policies are slowing liquidity in the short term and hemorrhaging risk assets, in the long term money printing will be a catalyst driving up cryptocurrency prices, he said.

Hayes said he had decided to refrain from trading until May, when he anticipates the cryptocurrency bull market will resume.

“I hope to return in May with dry powder ready to deploy and position myself for the bull market to begin in earnest,” he said.

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