Key Points
- Arthur Hayes predicts a short-term drop in Bitcoin’s price to $70K-$75K due to rising U.S. Treasury yields and inflation.
- Hayes also forecasts Bitcoin’s price could rise to $250K by the end of the year if a financial crisis prompts quantitative easing.
Arthur Hayes, BitMEX exchange co-founder, warns of a possible drop in Bitcoin’s price to $70K-$75K in the near future. This potential decline, he suggests, may be linked to increasing 10-year Treasury yields and their anticipated impact on stocks and cryptocurrency.
Bitcoin’s Potential Price Drop
The increase in Treasury yield often indicates tighter liquidity, making riskier assets such as stocks and cryptocurrencies less appealing than bonds. Hence, a rise in yield could negatively impact the crypto market, particularly Bitcoin. Hayes further explains, “Inflation is still elevated and likely to go higher in the near future as the world decouples economically. This is why I expect 10-year yields to rise… Stocks will dump.”
Given the strong link between U.S. stocks and Bitcoin, any such decline could also affect Bitcoin. Hayes believes Bitcoin could fall before U.S. stocks in a near-term liquidity squeeze.
Potential Rise in Bitcoin’s Price
Despite this, Hayes points out that such a financial crisis could prompt the U.S., China, and Japan to respond by printing more money and implementing quantitative easing (QE). He estimates a 60% likelihood of a QE pivot in the first or second quarter. According to Hayes, this could fuel Bitcoin’s rally to a new all-time high of $250K.
Meanwhile, Bitcoin’s ‘Everything Indicator,’ which measures miner profitability, money supply, and network growth, suggests that Bitcoin is halfway through its bull run. Historically, a reading above 80 marked previous cycle tops in 2017 and 2021. The current reading is above 50, indicating room for growth.
