- Event Context and Hayes’ Opinions
- Comparison of Cryptocurrency and Treasury Yields
- Future of Ethereum and Overall Forecast
At the Token2049 conference in Singapore on September 18, Arthur Hayes, former BitMEX co-founder, delivered a speech detailing the potential impacts of the upcoming Federal Reserve’s (Fed) interest rate cut on the cryptocurrency market.
Event Context and Hayes’ Opinions
Before discussing the implications for cryptocurrencies, Hayes criticized the Federal Reserve’s (Fed) strategy. He expressed the view that cutting rates at a time when the government is heavily printing and spending money is a mistake and could lead to market collapse shortly after the rate cut. Hayes pointed out that the anticipated rate cut of 50–75 basis points could destabilize markets by reducing the interest rate differential between the US dollar and the Japanese yen.
Comparison of Cryptocurrency and Treasury Yields
Hayes compared the yields of cryptocurrencies with those of Treasury bills, questioning the appeal of riskier investments when more secure options like T-bills offer comparable returns. He asked, 'Why would you invest in a riskier DeFi application when you can simply call up your broker and put your money in T-bills and make 5.5%?'
Future of Ethereum and Overall Forecast
Discussing the performance of cryptocurrencies like Ether, Hayes pointed out its recent underperformance compared to Bitcoin and labeled Ether as an 'internet bond' with a 4% yield. Despite current trends, he remains invested, forecasting a potential rebound. Hayes noted, 'If the yield drops quickly, as I expect, then Ethereum becomes money, and I’m earning more.' Concluding his speech, Hayes expressed the opinion that the rate cuts could lead to a market downturn but also reignite the Ethereum bull market.
Arthur Hayes warns of potential impacts of the Fed’s interest rate cut, noting it could affect both traditional and cryptocurrency markets.
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