Arthur Hayes Predicts Bitcoin Price To Fall To US$30,000

JAKARTA - Arthur Hayes, the former CEO of the BitMEX crypto exchange, has again predicted a reduction in the price of Bitcoin (BTC) to around 30,000 (Rp475 million) to US$35.000 (Rp554 million) in the near future. In his latest article entitled "Yellen or Talkin?", Hayes attributes his prediction to the monetary policy of the US Federal Reserve and global financial market conditions.

Hayes menilai bahwa penurunan sebesar 20% harga BTC belakang ini mungkin hanya puncak gunung es, dengan koreksi sebesar 30% dari titik tertinggi setelah persetujuan Exchange-Trad Fund (ETF) sebesar 48,000 dolar AS. Menurut observasi analisis teknikalnya, kondisi saat ini menempatkan level support di antara 30.000 dolar AS hingga 35.000 dolar AS.

According to data from CoinMarketCap, the price of BTC is currently at around $41,000, down about 15% from the highest level this year of $48,000 which was achieved on January 10.

Hayes rejected the argument stating that BTC's outflow from the Grayscale Bitcoin Trust (GBTC) was the cause of the Bitcoin price drop. He pointed out that if you consider the recently listed Bitcoin spot entrance to the ETF Bitcoin, there is a net inflow of $820 million as of 22 January. Bitcoin spot ETF is an investment product that buys and stores Bitcoin directly, in contrast to the futures or futures ETF which buys Bitcoin futures contracts.

However, Hayes outlined another explanation regarding the decline. The BitMEX founder linked Bitcoin's price drop to the possibility of not extending the Bank Term Funding Program (BTFP). BTFP is an emergency loan program created by the Federal Reserve in March 2023 to provide additional liquidity to US financial institutions. The program is scheduled to expire on March 12, 2024, unless extended by the Federal Reserve.

According to Hayes, without this support, major banks may face a financial crisis, which could adversely impact financial markets as a whole. This could trigger mass sales of a number of risky assets, including Bitcoin.

According to Hayes, the absence of government support through BTFP could trigger a small financial crisis. This condition forces the Federal Reserve to take quick steps such as cutting interest rates, reducing Quantitative Tightening (QT), or continuing Quantitative Easing (QE).

QT is a process in which the Federal Reserve reduces its balance sheet size by selling its assets, such as government bonds and mortgage bonds. While QE is the opposite, it is a process in which the Federal Reserve buys these assets to increase liquidity and lower interest rates.

Hayes criticized the Federal Reserve's approach to inflation. He alleges that the institution prefers verbal intervention rather than taking concrete actions for fear of inflation. In contrast to the general narrative, he stressed that inflation remains an important concern for many Americans. Inflation is also claimed to affect political outcomes. Hayes provides examples of rising fuel prices and food can harm retirees who depend on fixed income.