Arthur Hayes Predicts Bitcoin Will Benefit From ‘Volatility Supercycle’

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As a seasoned analyst with over two decades of experience in the financial markets, I find Arthur Hayes’ insights on Bitcoin and quantitative easing particularly intriguing. Having witnessed the aftermath of the 2008 global financial crisis, I can appreciate the parallels he draws between then and now, especially regarding the unprecedented monetary policies being adopted by governments worldwide.

As an analyst, I’m sharing insights based on predictions made by Arthur Hayes, co-founder of BitMEX. He posits that the quantitative easing (QE) strategies being implemented by various governments could potentially boost Bitcoin and the broader cryptocurrency market. His theory suggests that investors might reap benefits from this projected surge in Bitcoin’s price.

Arthur Hayes Expects Bitcoin To Benefit From Money Printing

In his latest blog post titled ‘Volatility Supercycle’, Hayes proposes that increased money printing by global governments could potentially boost the value of Bitcoin. He explains that this excessive fiat currency will likely be absorbed into Bitcoin and cryptocurrencies, as it has no other apparent destination. Furthermore, he emphasizes that Bitcoin, being the most technically sound digital asset in today’s world, serves as an effective counterbalance to the extravagant spending habits of powerful ruling elites.

Arthur Hayes’ statement is in response to the latest US Federal Reserve interest rate reductions and China’s economic stimulus plan. The Governor of the People’s Bank of China, Pan Gongsheng, has announced reductions in the reserve ratio requirement and short-term interest rates. Furthermore, China intends to infuse liquidity into its stock market as part of their recovery strategy.

According to the founder of MitMEX, the quantitative easing (QE) strategies implemented by these governments are likely to create a positive trend for Bitcoin. This surplus money might find its way into Bitcoin, increasing its value. Furthermore, Hayes emphasized that the aim for all investors, traders, and speculators is to buy Bitcoin at its lowest price point.

He mentioned several possibilities for this, such as receiving payment in Bitcoin, offering mining services, or taking out loans at low interest rates to buy Bitcoin. Meanwhile, the founder of BitMEX cautioned against using borrowed funds to purchase Bitcoin, emphasizing its intended purpose is to hold it for a long time.

There Are Risks Involved

Arthur Hayes cautioned that the main risk in adopting this Bitcoin strategy lies in the moment when the elites can no longer control market volatility, causing it to rise to its inherent level. He suggested that such a situation could trigger a system overhaul, hinting at a potential financial crisis. He anticipates that everything will experience a decline during that period, but he believes Bitcoin will drop less compared to other assets.

In essence, he stated that individuals who chose the Bitcoin approach would still surpass others, although their total affluence might decrease. While it’s widely thought that Bitcoin and digital currencies can serve as safe havens for investors, Hayes emphasized that there’s no such thing as a risk-free option in our universe.

Currently, Hayes anticipates Bitcoin to experience uninterrupted growth as governments persist in loosening monetary policies. He speculates that the U.S. Federal Reserve will likely reduce interest rates further and the banking system will generate more dollars. The Fed hinted at reducing rates by an additional 0.25% (or two 25 basis points) this year.

Arthur Hayes suggested that European governments may compel banks to grant additional loans to local businesses, enabling them to create jobs and repair deteriorating infrastructure. The cryptocurrency pioneer anticipates that China will increase its money supply if the Federal Reserve takes similar action. He predicts this would be only the beginning, with the real “bazooka” being deployed once China’s President Xi Jinping orders banks to expand credit issuance.

In simpler terms, as money becomes easier to access, Hayes anticipates that the value of Bitcoin and other cryptocurrencies is likely to increase significantly. He also recommends that those who have traditional currency consider investing it in the cryptocurrency market.

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2024-09-26 15:30