Arthur Hayes, co-founder of BitMEX and a prominent crypto market analyst, warns in his latest blog post that Bitcoin’s price may decline to $90,000 before initiating another bullish rally. In his article titled "Quid Pro Stablecoin," Hayes elaborates on how upcoming economic events and tightening liquidity could negatively impact the cryptocurrency market in the short term.
Currently trading around $109,000, Bitcoin’s potential drop might come as a surprise to many investors.
Why Does Hayes Anticipate a Pullback?
Hayes suggests that after the recent Bitcoin rally, many investors may cash in profits while the market awaits the Federal Reserve’s next moves. He highlights that if the U.S. Treasury replenishes its General Account (TGA), it could drain significant liquidity from the economy, pressuring risk assets—including cryptocurrencies.
According to Hayes, such corrections are natural during market cycles. He estimates Bitcoin could retreat to $90,000 before resuming its upward trajectory, a move he views as shaking out "weak hands" and cleansing the market for the next major rally.
Hayes predicts sideways or mildly bearish movements during summer months until the Jackson Hole Economic Symposium in late August. If macroeconomic conditions worsen, the Maelstrom investment fund—where Hayes holds stakes—may reduce its Bitcoin exposure. Notably, the fund has already divested less liquid altcoin positions.
Bank-Issued Stablecoins May Fuel the Next Bull Market
Hayes believes bank-issued stablecoins could play a pivotal role in this market cycle. The U.S. is increasingly open to regulated stablecoins, especially after the recent GENIUS Act, potentially enabling banks like JPMorgan to launch dollar-backed digital tokens.
These bank-issued stablecoins would differ drastically from existing solutions like USDC or Tether. Fully regulated and integrated with the Federal Reserve system, they’d offer consumer protection while serving as tools for tighter oversight of crypto cash flows.
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Could Trillions Flow into Crypto?
Hayes argues that bank-issued stablecoins could be a game-changer. By allowing banks to shift retail deposits into short-term U.S. Treasuries without breaching capital rules, these tokens could act as covert quantitative easing, injecting fresh liquidity into markets without direct Fed intervention.
Hayes estimates that if even a fraction of the $17 trillion in U.S. bank deposits migrates to stablecoins, it could generate up to $6.8 trillion in demand for Treasuries. This capital wouldn’t stay confined to bonds—a significant portion could spill into crypto and tech stocks, potentially igniting the next major bull run.
FAQs
1. How likely is Bitcoin’s drop to $90,000?
Hayes bases his prediction on historical pullbacks during bull cycles, but exact timing depends on macroeconomic factors like Fed policy and liquidity conditions.
2. What are bank-issued stablecoins?
Digital tokens backed 1:1 by fiat reserves, issued by regulated banks (e.g., JPMorgan’s potential token), offering higher compliance and integration with traditional finance.
3. How could stablecoins boost crypto markets?
By funneling institutional capital into crypto via compliant channels, they’d enhance liquidity and legitimize the asset class for large-scale adoption.
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Conclusion
While short-term corrections loom, Hayes sees bank-issued stablecoins as catalysts for long-term crypto growth. The coming months will be critical in shaping the next major market movement.
Disclaimer: This article reflects the author’s opinions and should not be construed as financial advice. Always conduct independent research and consult a financial advisor before making investment decisions.
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