Billionaire Arthur Hayes has shared a cautious perspective on the forthcoming Bitcoin halving and its potential impact on the asset’s price.
While many experts predict a substantial surge in Bitcoin’s value post-halving, Hayes suggests that the price movement before and after the event might actually trend negatively.
In a recent blog post dated April 8, Hayes highlighted the prevalent belief that the halving will drive crypto prices upwards. However, he warned against the common phenomenon where market consensus often leads to outcomes contrary to expectations.
Drawing from this observation, Hayes speculates that Bitcoin and overall crypto prices could undergo a downturn around the time of the halving.
US Dollar Liquidity to Impact Crypto Markets
Hayes’ apprehension is also fueled by the tightening of United States dollar liquidity expected around the Bitcoin halving date. He predicts that this liquidity shortage will prompt a sell-off of crypto assets. Consequently, Hayes has opted to refrain from trading until May, citing the period between April 15 (tax payment deadline) and May 1, when the Federal Reserve is slated to discuss potential adjustments to its Quantitative Tightening program.
Hayes elucidated that the anticipated moderation in the pace of Quantitative Tightening is advantageous for dollar liquidity as it slows the decline in the Fed’s balance sheet. He views May 1 as a pivotal moment, signaling the conclusion of a precarious period for risky assets and the resurgence of liquidity as Janet Yellen and the Fed implement measures to bolster asset prices.
Although Hayes doesn’t intend to short the market outright, he has liquidated profitable positions in various cryptocurrencies and plans to maintain a no-trade stance until May 1. He stated, “From now until May 1st, I will be in a no-trade zone. I hope to return in May with dry powder ready to deploy to position myself for the bull market to begin in earnest.”
Other Crypto Veterans Remain Optimistic
Despite billionaire Arthur Hayes’ cautious view, other industry executives, such as Ripple CEO Brad Garlinghouse, maintain optimism. Garlinghouse predicts that the total market value of cryptocurrencies will double this year, largely driven by spot ETFs and the Bitcoin halving. He believes that the introduction of real institutional money through ETFs is a significant factor contributing to this positive outlook. “I’m very optimistic. I think the macro trends, the big picture things like the ETFs, they’re driving for the first time real institutional money,” he told CNBC on April 7.
Similarly, Matteo Greco, a research analyst at digital asset firm Fineqia International, expects Bitcoin to reach $75,000 by the halving event. “Historically, BTC halving events have marked significant points followed by 9-18 months of uptrend, culminating in cycle peaks,” he wrote in a recent note.
On another positive note, investors poured a total of $646 million into crypto products, pushing year-to-date inflows to an unprecedented $13.8 billion and surpassing the previous year’s total of $10.6 billion.
