Bitcoin continued its downtrend, slipping below $56,000 on Wednesday. Arthur Hayes, co-founder and former CEO of BitMEX, warned that in a worst-case scenario, the largest crypto asset could decline to $50,000.
Bitcoin Decline
According to Hayes, despite this bearish outlook, he remains long on BTC and certain reliable altcoins. He noted that significant intervention, likely in the form of liquidity injections, could begin in late September of this year, which may stabilize the markets and potentially boost Bitcoin’s price.
Potential Altcoin Carnage
In his latest article titled ‘Boom Times… Delayed,’ Hayes predicted that altcoins could potentially experience even steeper losses. His bearish outlook is rooted in the broader macroeconomic environment, particularly the Federal Reserve’s actions and the US Treasury market dynamics. He noted that while the Fed has paused rate hikes as of the August 2024 Jackson Hole meeting, the bond market’s reaction has been more pronounced, with yields on 10-year Treasury bonds climbing towards 5%.
Compelling Opportunities
Current market conditions remain uncertain, and September has proven to be a bearish month, not just for crypto but across all asset classes. However, QCP Capital noted that October has the strongest bullish seasonality, with Bitcoin posting positive returns and an average gain of 22.9% in 8 out of the last 9 ones. If this seasonal trend holds true again this year, the trading firm suggests that accumulating assets during the September dip and taking profits in October or towards year-end could be a strategic move.
In conclusion, Hayes’ long-term thesis is that central banks will eventually resort to money printing to address economic challenges, which could ultimately be bullish for Bitcoin and other risk assets.
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