Former CEO Of BitMex: Bitcoin Can Crash Again If This HAPPENs!

The recent increase in the crypto market was caused by the Fed, which was again printing USD. (Photo; Doc. Unsplash)

JAKARTA Arthur Hayes, the former CEO of BitMex recently warned of the potential fall of Bitcoin. Hayes explained this was related to the Federal Reserve (The Fed) policy if it did not change its monetary policy of the current increase in monthly interest rates.

In a blog post on January 19, Hayes highlighted the impact of inflation on the crypto market. He noted that the inflation rate had declined after peaking at around 9 percent by mid-2022 and moving towards a 2 percent target.

Hayes also stated that investors expect the Fed to slow the rate hike amid the decline in inflation, especially to avoid a recession. He added experts argue that Fed chairman Jerome Powell is looking for an opportunity to shift from the current quantitative tightening (QT) policy.

Furthermore, the former CEO of the BitMex crypto exchange noted that the recent increase in the crypto market was caused by the Fed, which was again printing USD. Hayes assessed that if this happens, Bitcoin will continue its price increase performance in line with Fed's efforts to slow interest rate hikes.

On the other hand, Bitcoin and the crypto market will generally fall again if the central bank continues its current quantitative tightening (QT) policy.

"If the Fed doesn't follow up with a pivot, or some Fed governors shrink pivot expectations even after a "good" CPI, Bitcoin is likely to fall back to its previous lows," Powell wrote in a post on Medium.

For information, Pivot the Fed is a term used to explain when the Fed, the United States' central bank, changed its monetary policy from focusing on inflationary control to focusing on economic recovery.

This can be done in several ways, such as lowering interest rates, increasing asset purchases, or increasing bank financing. This Pivot the Fed is done to increase economic growth and reduce unemployment. However, it can also lead to higher inflation in the future.

Federal Reserve chairman Jerome Powell insists that interest rates will remain high until inflation reaches its goals. This suggests that pivots are unlikely just because the Consumer Price Index (CPI) is in a lower trend.

According to the latest data, the annual inflation rate fell to 6.5 percent in December, compared to 7.1% in November. Lunar inflation fell 0.1 percent, compared to an increase of 0.1 percent in the previous month.

Meanwhile, major cryptocurrencies have recorded a significant increase in recent weeks. Bitcoin surged to more than $23,000 per BTC on Saturday, reaching an unprecedented level for more than five months after FTX shocks.

Ethereum, the second-largest cryptocurrency, also recorded a significant rise, with a local high of around $1,674 on the same day. Both coins rose more than 30 percent over the past month.