BitMEX Founder, Arthur Hayes Unveils His Bitcoin Price Prediction

Arthur Hayes, co-founder and former CEO of crypto exchange BitMEX, recently shared insights into his Bitcoin price prediction strategy based on upcoming global macro events.

In an elaborate disclosure on Medium today, Hayes advised market participants to exercise caution despite his bullish stance on the crypto market’s long-term prospects. Recall that the market veteran asserted last October that the upcoming bull market will be the biggest in history.

Bitcoin Price Prediction: Potential Correction

Nonetheless, Hayes believes the market could collapse three months into the new year, predicting a substantial correction of 20% to 30% for Bitcoin by early March, with the possibility of an even more severe downturn if the SEC approves spot Bitcoin ETFs and they begin trading before March.

He believes ETFs could trigger a significant fiat influx into the market, potentially propelling Bitcoin to surpass $60,000. Such a price appreciation would bring the premier crypto close to its all-time high of $69,000 in November 2021.

According to Hayes, after this uptrend, a 30% to 40% correction due to a rug pull in dollar liquidity could ensue. As a result of this projected price collapse, Hayes notes that he would refrain from buying Bitcoin until after the slew of prices for upcoming global macro events.

Upcoming Global Macro Events

In addition to the ETF development, Hayes also points out several upcoming macro events that investors should watch out for. He contends that these events could further impact the crypto market in March, depending on how things turn out.

RRP Balance Decline and BTFP Renewal

The market veteran called attention to the Reverse Repo Program (RRP) balance. This balance reflects the money entering into the financial system, and a decline suggests potential challenges in maintaining the current liquidity.

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Notably, this metric has continued to decline since the start of 2023. As the balance approaches $200 billion in early March, concerns will emerge about where the market will find additional dollar liquidity.

In addition to the Reverse Repo Program balance, Hayes emphasizes that the decision on whether to renew the Bank Term Funding Program (BTFP) on March 12 also holds significance for banks and their access to cash. 

If renewed, it provides financial support to banks; if not, banks might face challenges obtaining necessary funds, impacting their stability and potentially influencing broader market conditions.

According to Hayes, if the Reverse Repo Program (RRP) balance declines gradually and the Bank Term Funding Program (BTFP) is renewed, the market could stay stable. Hayes notes he might then resume buying Bitcoin and other cryptocurrencies. 

However, Hayes believes a swift decline in the RRP balance and the cancellation of the BTFP could lead to a market downturn. In response, he may contemplate a significant put option position on Bitcoin, a strategy to protect against potential losses in a declining market.

Fed Rate Cut and Other Macro Factors

Moreover, in the Federal Reserve’s March meeting on 20, there is a 75% market expectation of a 0.25% rate cut. According to Arthur Hayes, this decision could shape assumptions about future dollar liquidity. 

The Fed uses rate cuts to influence economic conditions. In this case, it might be employed to stimulate the economy by making borrowing cheaper. This, in turn, could impact investor sentiments and affect the crypto market.

In addition, Hayes says external factors like the Taiwan elections or rising JGB yields in Japan might impact his trading strategy.  While acknowledging potential downside risks and uncertainties, Hayes suggests that by the end of March, markets may stabilize, and crypto could resume an upward trajectory.

Meanwhile, BTC has sustained efforts toward recovering the recent losses. The asset is up 1.16% over the past 24 hours to $43,835, looking to reclaim the $44,000 price territory. Despite the campaign, 24-hour trade volume is down 6% to $34,749,966,731.