- Arthur Hayes, former CEO of crypto exchange BitMEX, said he expects a mini financial crisis to trigger a 30% correction in the price of Bitcoin before the price recovers to US$250,000 later this year.
- Hayes said the crisis will be triggered by a collapse in the US 10-year treasury market, before the Fed steps in and restarts money printing, leading to a strong recovery.
- If his prediction plays out, Hayes thinks the price of many ‘shitcoins’ will fall by over 50% during the crisis, presenting an excellent opportunity to accumulate before the market recovers.
After spending much of last year telling anyone who’d listen how bullish he was about 2025, former BitMEX CEO, Arthur Hayes, now says he thinks the price of Bitcoin is in for a huge correction before it potentially surges to US$250,000 (AU$400k) later this year.
Writing on his blog earlier this week, Hayes said he’d seen some worrying signs for the crypto market in the past few weeks, citing in particular the relationship between US 10-year treasury/stocks/Bitcoin prices and the performance of the $TRUMP memecoin — the latter of which he says “produced a pit” in his stomach.
I don’t believe this bull cycle is over; however, on a forward-looking probabilistic basis, I think we are more likely to go down to $70,000 to $75,000 Bitcoin and then rise to $250k by the end of the year than to continue girding higher with no material pullback.
Arthur HayesHayes anticipates a mini financial crisis this year, triggered by a rise in the US 10-year treasury bond yields to between 5-6% which he said will be the catalyst for a renewed program of money printing in the US and many other countries. He sees the price of Bitcoin dropping by 30-35% to the US$70,000 – $75,000 (AU$113k – $120k) range and some altcoins by over 50%, before the market rebounds strongly when the money printing gets going.
Related: Arthur Hayes Predicts Market Peak by March 2025 Amid Political Uncertainties and Surge in Dollar Liquidity
Hayes: Trouble Ahead, But US Fed To the Rescue (Again)
Hayes believes his predicted collapse in the US 10-year treasury market will happen due to a fall in demand for US debt as the main buyers of that debt at the moment are relative value hedge funds. Hayes thinks they’re going to run out of money to keep buying.
When that happens, according to Hayes, the price of US 10-year treasuries will fall and the yield will increase to above 5%, which in turn will cause interest rates on things like mortgages and car loans to increase.
All this would mean less money for people to invest in crypto, a reduced appetite for risk-on assets, and therefore a significant drop in crypto prices.
Of course, there’s a tried and true way for the US Federal Reserve to minimise the damage from this kind of mini-crisis — print more money. However, Hayes said the Fed is unlikely to take this step — for largely political reasons — until after the crisis has already hit, explaining:
Statements by former and current Fed governors and the Fed’s actions during the Biden presidency led me to believe the Fed will do what it can to frustrate the Trump agenda.
Arthur HayesEventually though, Hayes says the Fed would be forced to take action and restart the printing machines in order to save the US economy from a larger crisis:
However, the Fed’s obstruction has a limit. If the failure of a large financial player or the solvency of the empire itself required changing banking regulations, lowering the price of money, or printing money, then the Fed would show no hesitation in acting accordingly.
Arthur Hayes$TRUMP Was a Top Signal, Says Hayes
In addition to these macroeconomic factors, Hayes also believes the performance of $TRUMP, which hit a fully diluted market cap of over US$100 billion (AU$160k) within 24 hours of its launch was a clear top signal — likening it to some of the signs we saw during the euphoric phase of the 2021 bull market:
$TRUMP is a top signal in my mind in the same way that FTX buying umpire logo rights for US Major League Baseball was in the 2021 bull market.
Arthur HayesRelated: Aussie Analyst Says Trump Memecoin Launch Changed Crypto Forever
In the end Hayes thinks there’s a 60% chance the price of Bitcoin will see a ~30% correction. If this were to happen, Hayes said many alts and memecoins would be hit much harder, presenting an excellent opportunity to accumulate before the expected surge later in the year:
The shitcoin space will face Armageddon if Bitcoin dumps, and that’s where I really want to play…The stuff of the highest quality will sell off >50% if Bitcoin drops by 30%. The final mega liquidation candle on Bitcoin will tell me when it’s time to back up the truck and go shopping for crypto dung.
Arthur HayesKeep in mind though that in late 2024, Hayes rated his own market predictions success rate at 25% — and posited that “short-term macroeconomic predictions don’t matter…”
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