What Arthur Hayes did wrong with his latest market forecast

What Arthur Hayes did wrong with his latest market forecast

Bitmex co-founder and macroma parking analyst Arthur Hayes, according to his latest blog post, previously sets in his dry powder than previously planned in Bitcoin.

Hayes argued that despite his fears before a future decline in the cryptom market, there is still the opportunity to benefit from the continued rally in risk systems that began last month.

The rally is not over yet

Hayes began his contribution entitled " be present ", by alluding to his allocation Reporting on the celebrated Bitcoin rally in January, which brought the asset for the first time since FTX's collapse.

At that time, risk systems recovered on a broad front after strong signs of disinflation had occurred in December. This signaled to the markets that the Federal Reserve mission could soon end in the fight against inflation, which made it possible for her to re -enact a more moderate monetary policy.

Hayes, however, warned that there is a good probability that the rally is a bull trap and that retracement is still in sight to Bitcoin's $ 16,000. Therefore, the analyst has held its excess capital in market funds and short-term US treasure changes and has "missed" Bitcoin's 50 percent profits since then.

The co-founder has now considered again and believes that Bitcoin's rally is not over yet-for two reasons. First, the Treasury General Account (TGA) will soon spend a further $ 500 billion in business due to the country's rapidly approaching debt limit-and thus increase liquidity and support risk systems.

Secondly, the speech by the chairman of the US Federal Reserve, Jerome Powell, makes the market appear again last week after the FOMC. This could inspire other-including Hayes-to remove money from money market funds and long-risk systems. This reduces the RRP balance, systemic liquidity increases and risk systems will continue to benefit.

"A little more than 2 trillion US dollars are currently parked in RRP, which corresponds to a decline of around 200 billion US dollars since the end of the year 2021," explained Hayes.

Hayes' Usual reason for optimism still applies: the central banks around the world return to "Business as Usual"-they print money into their economy and drive up costs. In particular, he called on the Bank of Japan to "be absolutely determined to take care of a hyperinflation", which takes place in the country, in which inflation last a tap .

what's next

Although there could be good things for Krypto in store at short notice, Hayes warned that the markets could get into difficulties by the middle of the year as soon as the TGA funds are exhausted. At this point he predicts a "political circus", according to which the congress finally raises the debt limit and stimulates the US Ministry of Finance to issue bonds to finance the federal deficit.

in combination with the ongoing plans of the Federal Reserve, throwing US state bonds worth $ 100 billion on the market, each event will withdraw considerable liquidity to the market.

"I would say that this future is negative for risky facilities on the margin," advised Hayes. "This means that if you plan to buy risky assets now, you have to be ready to watch the market very carefully and are ready to press the sales button as soon as the TGA has been completely pulled down to zero, but the blanket is raised."

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