- Recent crypto volatility has stoked concerns about the bull cycle ending.
- Arthur Hayes expects U.S. stimulus measures ahead of the upcoming election.
- Bitcoin to benefit greatly from added liquidity, particularly when China joins the U.S. in pumping its economy.
2024 has delivered a dramatic twist for crypto enthusiasts, with Bitcoin briefly soaring to $74,000 and igniting hopes of Lambo buying sprees. However, a sharp decline since then has introduced a wave of uncertainty, leaving many to question the strength of the current market trend .
In contrast, BitMEX co-founder Arthur Hayes remains undeterred, reiterating his belief that Bitcoin will soar as high as $1 million during this cycle. This unreal forecast is rooted in Hayes’ observations on the U.S. debt market and the political drive to jump-start the economy ahead of the upcoming election.
U.S. to Turn on Liquidity Taps
In his latest article, titled “Water, Water, Everywhere,” Hayes outlined how Bitcoin’s potential rise to $1 million depends on a significant liquidity boost from the U.S. Treasury, aimed at stimulating the economy ahead of November’s election.
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Under this plan, Hayes argued that the Treasury is set to deploy substantial funds into the economy, particularly via short-term Treasury bills (T-bills). This strategy involves issuing T-bills to attract funds currently held in the Fed’s Reverse Repo Program (RRP) and bank reserves.
Hayes stated that because T-bill yields are higher than the RRP, money market funds will be encouraged to shift their holdings. This shift could release up to $3.6 trillion in liquidity, which Hayes sees as a potential boon for asset markets, including Bitcoin and cryptocurrency.
In addition to T-bills, the Treasury’s Buyback Program could further inject liquidity by replacing less liquid securities with T-bills, potentially contributing another $30 billion. While drawing down the Treasury’s General Account balance of $750 billion could add further funds into the mix.
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All in all, Hayes’ analysis puts the combined stimulus measures as injecting between $301 billion and $1.05 trillion into the economy by the year-end, with Bitcoin primed to benefit greatly from the abundance of liquidity.
Bitcoin to Pump, Altcoins to Benefit
Anticipated stimulus measures are expected to drive substantial inflows into assets like Bitcoin, potentially boosting its price significantly. Hayes predicted an initial rise to $100,000 due to increased liquidity, with Bitcoin possibly reaching $1 million if China also introduces its own ‘Bazooka fiscal stimulus.’
Regarding altcoins, Hayes forecasted that a broader altseason might not begin until Bitcoin reaches $70,000 and Ethereum hits $4,000. In this scenario, the BitMEX co-founder anticipates a trickle-down effect that could drive altcoin prices higher, setting the stage for a vibrant end-of-year rally.
On the Flipside
- Cryptocurrency markets are notoriously volatile and influenced by a wide range of factors beyond just liquidity.
- There is no shortage of bold crypto price predictions.
- Jan3 CEO Samson Mow also expects a $1 million Bitcoin .
Why This Matters
Hayes’ $ 1 million Bitcoin price prediction is a long shot from where the market currently stands. Whether that price target is hit or not, the coming months in the crypto landscape are sure to be anything but dull.
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