Mayday! Mayday! Arthur Hayes Raises Alarm Over Crypto Crash

  • Prominent author and analyst Arthur Hayes believes the current market dip was easy to predict and is playing out exactly as it should.
  • He suggests that US tax time, on top of slowing inflows for spot Bitcoin ETFs, has led to a necessary market cleansing.
  • Looking at several government economic policies, Hayes argues that greater liquidity and cash is set to enter the market toward the end of 2024.

Has the support finally been broken? Bitcoin, and the crypto market as a whole, has held up fairly well amid a wave of red across all financial sectors. That is, BTC clung onto the US$60K (AU$91K) floor price that held strong during the weeks prior. However, after a rough weekend, Bitcoin has finally fallen beneath the support level, and many other cryptocurrencies are following suit. So is the current dip a sign of things to come, and what’s behind it? 

Related: Bitcoin Struggles Below $60K Amid Decreased Demand; Analysts Weigh In

Markets Played Out “As…Expected”

In a recent blog post, analyst Arthur Hayes turned the microscope onto the crypto market, and in particular, what’s influenced the current downturn. He began by mocking the panicked, “paper hands” sellers that took to social media to proclaim the end of the market as we know it.

All things considered, Hayes believes now is actually time for considered buying and reflection, rather than throwing the toys out of the cot. He argues that the current “crash” isn’t anything to be concerned about, and that many in the industry predicted its arrival.

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  • It’s approaching tax season in the United States – the world’s biggest crypto (and financial) markets – which often wreaks havoc on price action as businesses and institutions consolidate losses and sell out of positions.
  • He suggests that the Bitcoin halving was a “sell the news” event, and it will take time for the effects of restricted supply to truly take shape.
  • The rush of money into the industry due to spot Bitcoin ETFs was always going to slow at some point.

Put together, Hayes believes that the current dip is a “much needed market cleansing” that will remove many of the weekend warriors from the sector, leaving the… ahem… “hard m—f—ers” to HODL their favourite assets.

Looking forward, the post argues that the US Government and Federal Reserve are making moves that will benefit the crypto industry in the long run. He notes that the Feds are reducing quantitative tightening efforts (therefore adding liquidity) to the economy. Pair that with high interest rates, financial stimulus to important players (aka whales) is set to ramp up.

He also notes that the US Government’s bailout of the Republic First Bank suggests a “stealth guarantee” for all deposits in the US banking system. AKA – money printer goes BRRRRRRRRR.

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Put it all together, Hayes predicts Bitcoin to slowly recover from its current slump and sit in the US$60-70K range – before all of the new liquidity and money in the economy sends the coin to the moon in the latter half of 2024.

TL;DR: It’s diamond hands season.

Ben Knight
Author

Ben Knight

Ben Knight is a writer and editor from Melbourne with a passion for all things music and finance. He enjoys turning complex topics – especially the technical details of cryptocurrency – into digestible bites that anybody can understand. He acquired his Master’s in Writing, Editing and Publishing from RMIT in 2019 and has run his own creative writing business ever since.

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