Bitcoin and other risk assets to undergo correction? BitMEX founder warns…

• A massive cryptocurrency price correction is reportedly on the way, but it may be followed by a sustained bull run.
• Bitcoin and other risk assets are likely to experience a massive correction soon.

Arthur Hayes, co-founder and former CEO of cryptocurrency derivatives exchange BitMEX, has warned that a massive cryptocurrency price correction is on the way, but that it will be followed by a sustained bull run.

Hayes was talking during a Crypto Banter interview when he said that Bitcoin [BTC] and other risk assets are likely to experience a massive correction in the near future as a massive amount of liquidity exited the market.

Moreover, in a recent blog post, Hayes stated that the United States will likely raise its debt ceiling this year and issue $1.1 to $1.2 trillion in Treasury bonds to fund the 2023 USG Federal Deficit, which the Congressional Budget Office estimates to be around those figures.

Hayes also mentioned in his post that as the Treasury sells off loans, the Federal Reserve remains determined to lowering its holdings in US Treasuries by $100 billion per month, which he claims poses a risk to assets by depriving the market of significant liquidity.

According to Hayes, the Treasury’s flood of debt into the market, combined with the Federal Reserve’s ambiguous messaging, has created an environment of uncertainty and caution for investors. Hayes advised his readers to keep a close eye on the market and be ready to act quickly.

Hayes stated that the Treasury General Account (TGA) is a critical indicator to monitor because it will indicate when the government has exhausted its cash reserves and is approaching the debt ceiling.

Bitcoin remains tied to global risk assets

Hayes stated in the interview that Bitcoin hasn’t truly escaped its correlation with global risk assets, and he believes it is due for a correlation one day, implying that everything, including Bitcoin, will crash massively together.

While the CEO of BitMEX acknowledges that though BTC has the potential to break the $20,000 mark, he believes that a further decline is plausible. He remains bullish on Bitcoin’s long-term prospects, particularly considering the response of monetary and fiscal authorities during times of economic distress.

Hayes believes that if there is another economic downturn, governments will push money into the economy and print more currency, driving up the value of Bitcoin even further. Furthermore, Hayes claims that both Bitcoin and Ethereum [ETH] will maintain their upward momentum, before alternative cryptocurrencies go “vertical.”