When will $70,000 be recovered?

Arthur Hayes Says Bitcoin has Hit Bottom: When Will the $70,000 Be Recovered?

CEO of BitMEX, Arthur Hayes has a long history in the cryptocurrency industry. Hayes is a graduate of the University of Pennsylvania’s Wharton School of Business. He started working as an equity derivatives trader in 2008. In 2014 he founded BitMEX, the leading cryptocurrency derivatives platform.

Hayes published a post on the BitMEX blog to discuss the current state of the situation Bitcoin and where he sees the price going in the future. In particular, he focuses on the Federal Reserve and Republic First Bank.

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The Federal Open Market Committee (FOMC) recently announced that it will lower the quantitative tightening (QT) rate from $95 billion per month to $60 million per month. This means that they will sell fewer financial instruments on the open market each month. By doing this, they can lower interest rates and provide some stimulus to the economy.

Hayes goes on to point out that in the previous months the FOMC did not reach the $95 billion QT quota, so there is the potential for it to not reach the $60 billion mark. According to Hayes, this is positive for the liquidity of the US dollar and, consequently, for Bitcoin.

Another potential positive for Bitcoin is the collapse of First Republic Bank. Fulton Bank purchased it in late April 2024, and the FDIC approved it as “the least expensive resolution for the DIF.” In essence, the acquisition was the result of allowing the FDIC to spend the least amount of money on deposit insurance.

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However, as Hayes points out, the FDIC covered more deposits than required by law. The FDIC only insures deposits up to $250,000. However, under the First Republic, the FDIC gave Fulton Bank the liquidity it needed to fully insure all deposit accounts. According to Hayes, allowing deposits to be uninsured “is politically unpalatable in an election year, especially if the powers that be have continually assured the public that the banking system is sound.” Thus, the move essentially set a precedent to fully insure deposits.

If more banks failed, this precedent would inevitably lead to more money printing, as the FDIC would have to borrow from the Fed to satisfy all the deposits. For some, this could be seen as reckless, as it places more value on the constant and predictable supply of Bitcoin.

The story continues

To conclude the post, Hayes summarizes his position in three points:

1. Bitcoin hit a low of $58,600.

2. Bitcoin will be between $60,000 and $70,000 until August

3. The Fed and FDIC are secretly printing money, giving Bitcoin more validity

So, with some evidence coming from macro policy and recent events in the banking sphere, Hayes believes there is room for Bitcoin to rally in the coming months as the effects of recent moves begin to show.

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This article Arthur Hayes Says Bitcoin has Hit Bottom: When Will the $70,000 Be Recovered? originally appeared on Benzinga.com

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