Arthur Hayes Predicts Bitcoin Downturn Until August, Warns of Potential Drop to $90K

Arthur Hayes, co-founder of BitMEX and a prominent voice in the crypto industry, has shared his latest Bitcoin (BTC) market outlook. In a recent blog post, Hayes forecasted that Bitcoin and the broader crypto market may experience sideways movement or a mild bearish trend until the Jackson Hole Economic Symposium in August.

The outspoken analyst warned that US government bond purchases currently represent a flawed strategy. He argued that the recent regulatory support for stablecoins isn't designed to benefit fintech firms like Circle, but rather to strengthen traditional banking institutions and replenish Treasury coffers.

Hayes explained that the US Treasury requires innovative methods to sell trillions in bonds and refill the Treasury General Account (TGA) without triggering interest rate hikes. This has reportedly led Treasury officials to explore stablecoins as alternative buyers. However, Hayes views this as a high-stakes liquidity play that could negatively impact Bitcoin's price.

According to Hayes' analysis, US banks could potentially generate $6.8 trillion in purchasing power through stablecoin issuance, converting existing deposits into bond purchases. While this might eventually inject liquidity into markets, Hayes cautioned about short-term consequences: Bitcoin could potentially decline to the $90,000-$95,000 range if Treasury replenishment efforts strain USD liquidity.

In response to these market dynamics, Hayes revealed that his investment firm Maelstrom has divested all illiquid altcoin positions and may reduce Bitcoin holdings depending on market conditions. He emphasized this reflects personal portfolio strategy rather than investment advice.

Disclaimer: This analysis should not be construed as investment advice.