Crypto Bull Run Set To Return Next Week, Predicts Arthur Hayes
26 Abril 2024 - 2:00AM
NEWSBTC
Arthur Hayes, co-founder and former CEO of the cryptocurrency
exchange BitMEX, took to X to provide a detailed analysis of the US
economic landscape and its potential effects on the crypto market.
With a reputation for incisive commentary and a deep understanding
of both traditional and digital finance, Hayes’s insights are
closely watched by industry participants. Why The Crypto Bull Run
Will Return As Soon As Monday In a post, Hayes noted a significant
increase in the Treasury General Account (TGA), which he attributed
to an influx of approximately $200 billion from tax receipts. “As
expected tax receipts added roughly $200bn to TGA,” Hayes stated,
setting the stage for a broader discussion on potential
implications for financial markets. Hayes then shifted focus to
upcoming decisions by US Treasury Secretary Janet Yellen concerning
the management of the TGA. With a tone mixing respect and
sternness, he outlined several potential scenarios, each with
profound implications for market liquidity. “Forget about the May
Fed meeting. The 2Q24 refunding announcement comes out next week.
What games will [Janet] Yellen play, here are some options,” Hayes
remarked. Related Reading: Vertex AI Price Forecast: Bitcoin Has
60% Chance Of Hitting $100,000, Key Predictions Unveiled Firstly,
he suggested that by “stopping issuing treasuries by running down
the TGA to zero,” Yellen could unleash a $1 trillion liquidity
injection into the economy. This strategy would involve using the
accumulated funds in the TGA for federal spending without issuing
new debt, thus directly boosting the money supply. Secondly, Hayes
speculated about “shifting more borrowing to T-bills, which removes
money from RRP,” resulting in a $400 billion liquidity boost. This
maneuver would involve the Treasury opting for shorter-duration
debt instruments, which typically carry lower interest rates but
increase the turnover of government securities. This could
potentially draw funds away from the overnight reverse repo market,
where financial institutions temporarily park their excess cash.
Combining these two approaches, according to Hayes, could lead to
“a $1.4 trillion injection of liquidity” if Yellen decides to both
cease long-term bond issuance and ramp up the issuance of bills
while depleting both TGA and RRP accounts. Hayes emphatically
noted, “The Fed is irrelevant, Yellen is a bad bitch, you best
respect her.” This statement underscores his belief in the
significant impact of Treasury actions over Federal Reserve
policies in the current economic setup. Related Reading: Bitcoin
Whales Continue Buying, Now Hold 25.16% Of All Supply Hayes
predicted that these actions could lead to a bullish response in
the stock market and, more crucially, a rapid acceleration in the
crypto market. “If any of these three options happen, expect a
rally in stonks and most importantly a re-acceleration of the
crypto bull market,” he explained. The implications of such fiscal
strategies are significant. Increased liquidity typically
diminishes the appeal of low-yield investments like bonds and
encourages the pursuit of higher returns in riskier assets,
including equities and cryptocurrencies. Moreover, a shift in
market sentiment toward ‘risk-on’ could see substantial capital
flows into the crypto space, perceived as a high-growth, albeit
volatile, investment frontier. In conclusion, Hayes’ analysis
suggests that the coming week – the refunding announcement comes on
Monday, April 29 – could be critical for market watchers. His
perspective, drawing from deep financial expertise, points to a
possible pivotal shift in US fiscal policy that could ripple
through global markets. For crypto investors, these developments
could signal important movements, underlining the need for
vigilance and readiness to respond to new economic signals. At
press time, BTC traded at $64,483. Featured image from
Shutterstock, chart from TradingView.com
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