| by Thomas Derks
Arthur Hayes, the former CEO and founder of BitMEX, expects the market to face another massive crash before another bull run can begin. “I think bitcoin has not yet escaped its correlation with global risk assets. […] But I think there’s a ‘correlation one’ moment coming up,” said Hayes.
What does this mean?
The “correlation one” moment that Hayes talks about refers to a moment when the correlation between bitcoin and, for example, the S&P 500 and the Nasdaq 100 is around 1.0. This basically means that bitcoin is moving in sync with the US stock indices at that time.
“By that moment I mean everything falls down at the same time, including bitcoin. Do I think we will break the lows of the FTX scandal? No. But can we lose the $20,000? Hayes.
After that, Hayes foresees an extremely bullish scenario for bitcoin, which will play out even if all other assets go to the sharks. For this, Hayes refers to the central bank response needed to stop the misery. For this, the money printers will soon have to run at full speed again.
The response of central banks
Hayes thus foresees a problem scenario for the coming months, which will ultimately force central banks to cut interest rates massively and stimulate the economy. That ensures that the relative scarcity of the US dollar decreases and people flee en masse to the scarcity of bitcoin, if you ask Hayes.
If it is up to Hayes, then the current rally is likely not to last long and we should prepare for further declines. However, according to the former CEO of BitMEX, this is a temporary drop in the price, because he foresees a huge bull run afterwards.
That bull run may well start after the March 2024 halving, which is also getting closer. In the past, that has at least been a point where the market went from bearish to bullish. For now it will be a wait and see, but Hayes is at least positive for the long term.
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