Arthur Hayes analyzes the current macroeconomic situation and predicts that cryptocurrency prices may remain flat or slightly decline before the Jackson Hole conference in August.
He emphasizes the increasing role of traditional banks and stablecoins in activating a new upward cycle in the cryptocurrency market while warning of potential risks from the U.S. Treasury withdrawing liquidity.
MAIN CONTENT
Bitcoin's price could slightly decline to around $90,000 due to profit-taking by investors and unclear signals from the Fed.
Traditional banks and stablecoins are expected to drive the next price surge in the cryptocurrency market.
The flow of up to $6.8 trillion from bank deposits could pour into Treasury and spill over into cryptocurrencies, creating a new liquidity boom.
Why does Arthur Hayes predict Bitcoin's price will slightly decline?
According to expert Arthur Hayes, a market correction is likely to occur in the short term. With Bitcoin's recent price increase, investors may take profits while waiting for clearer signals from the U.S. Federal Reserve (Fed).
The key point is that if the U.S. Treasury begins injecting money into the general account (TGA), it could withdraw liquidity from the system, creating pressure on risk assets like cryptocurrencies.
"The market could witness a slight decline to shake out weak investors before entering the next bull phase."
Arthur Hayes, CEO, June 2024
What influences the price movement of Bitcoin according to Hayes?
Hayes bases his predictions on market cycles and changes in sentiment, forecasting that Bitcoin's price could drop to $90,000 before recovering. He also warns that liquidity shortages could create a 'summer stagnation' phase with flat or slightly declining prices until the Jackson Hole conference at the end of August.
If macroeconomic conditions become increasingly difficult, Hayes's Maelstrom fund will reduce its Bitcoin investment ratio, even though they have divested from illiquid altcoins.
How can traditional banks and stablecoins drive the next bull run?
According to Hayes, the difference in this cycle lies in the increasing involvement of traditional banks in the cryptocurrency space. With the U.S. government showing support for stablecoins through the approval of the GENIUS act, major banks like JPMorgan may issue separate USD-pegged stable tokens.
"Bank-issued stablecoins will be tightly regulated, have access to the Fed's system, and could change the entire way money flows in the cryptocurrency market."
Arthur Hayes, CEO, June 2024
Unlike existing stablecoins like USDC or Tether, bank tokens are fully legally controlled and supported by the Fed's reserve system, enhancing safety for users and allowing the U.S. government better control over money flows in the market.
What impact does the issuance of bank stablecoins have on cryptocurrency liquidity?
Hayes believes this is a major turning point. Bank stablecoins will allow financial institutions to convert retail deposits into safe short-term Treasury bonds without violating capital regulations.
This is considered a new liquidity injection method characterized as 'unofficial quantitative easing', contributing to the flow of capital without direct intervention from the Fed.
How might the actual flow of $6.8 trillion affect the market?
Arthur Hayes estimates that if just a portion of the total $17 trillion deposited in U.S. banks shifts into these new stablecoins, it could create a demand of up to $6.8 trillion for Treasury securities.
This massive influx of capital is not limited to the bond channel but could also flow into cryptocurrencies and tech stocks, setting the stage for a strong next bull market.
Comparison table of the characteristics of major stablecoins and bank stablecoins
Characteristics of USDC / Tether Bank Stablecoin Owner Non-bank Organization Traditional Bank Regulation Lower regulation, highly controversial Strict regulation, supported by the Fed Reserve Support Varies, often bonds or cash Fully supported through Fed accounts or equivalents Accessibility Widely available in the cryptocurrency market Restricted, focused on mainstream channels Market Impact Stabilizes liquidity in crypto Promotes intermarket liquidity, creating larger waves
Frequently Asked Questions
When does Arthur Hayes predict Bitcoin's price will decline? He believes Bitcoin's price may decrease slightly until August, when the Jackson Hole economic conference takes place. Why are bank stablecoins seen as a turning point? They have full legal backing from the Fed and traditional banks, enhancing safety and liquidity in the market. How does the $6.8 trillion flow affect cryptocurrencies? This capital could shift from bank deposits to stablecoins, thereby boosting liquidity for cryptocurrencies and tech stocks. How might the U.S. Treasury impact market liquidity? If the U.S. Treasury injects liquidity into the general account, it would withdraw liquidity from the market, putting pressure on risk assets. What does the Maelstrom fund plan to do if the market worsens? The fund will reduce its Bitcoin ratio and has divested from less liquid altcoins to mitigate risk.
Source: https://tintucbitcoin.com/bitcoin-co-the-giam-ve-90-000-usd-2/
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