Bitcoin
When will $70,000 be recovered?
Arthur Hayes Says Bitcoin Has Hit Rock Bottom: When Will $70,000 Be Recovered?
BitMEX CEO Arthur Hayes has a long history in the cryptocurrency industry. Hayes graduated from the Wharton School of Business at the University of Pennsylvania. He began working as an equity derivatives trader in 2008. In 2014, he founded BitMEX, the leading cryptocurrency derivatives platform.
Hayes posted on the BitMEX blog to discuss the current state of Bitcoin and where he sees the price going in the future. In particular, he focuses on the Federal Reserve and Republic First Bank.
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The Federal Open Market Committee (FOMC) recently announced that it would reduce the rate of quantitative tightening (QT) from $95 billion per month to $60 million per month. This means they will sell fewer financial instruments on the open market every month. By doing so, they can reduce interest rates and provide some stimulus to the economy.
Hayes goes on to note that in previous months, the FOMC exceeded the $95 billion QT quota, so there is potential for them to exceed the $60 billion quota. According to Hayes, this is positive for the liquidity of the US dollar and, in turn, for Bitcoin.
Another potential positive for Bitcoin is the collapse of First Republic Bank. Fulton Bank purchased it in late April 2024 and the FDIC approved it as “the least costly resolution for the DIF.” Essentially, the acquisition was the result that allowed the FDIC to spend the least amount of money on deposit insurance.
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However, as Hayes points out, the FDIC covered more deposits than required by law. The FDIC only insures deposits up to $250,000. However, with the First Republic, the FDIC gave Fulton Bank the money it needed to fully guarantee all deposit accounts. According to Hayes, allowing any deposits to be uninsured “is politically distasteful in an election year, especially if the powers that be have continually assured the public that the banking system is sound.” Thus, the measure essentially set a precedent for fully guaranteeing deposits.
If more banks failed, this precedent would inevitably lead to more money printing, as the FDIC would have to borrow from the Fed to satisfy all the deposits. For some, this may be seen as reckless, placing more value on Bitcoin’s consistent and predictable supply.
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To close the post, Hayes summarizes his position in three points:
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Bitcoin hit a low of $58,600.
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Bitcoin will remain in the range between US$60,000 and US$70,000 until August
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The Fed and FDIC are stealthily printing money, giving Bitcoin more validity
So, with some evidence from macroeconomic policy and recent developments in the banking sphere, Hayes believes there is room for Bitcoin to rise in the coming months as the effects of recent moves begin to be felt.
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This article Arthur Hayes Says Bitcoin Has Hit Rock Bottom: When Will $70,000 Be Recovered? originally appeared in Benzinga.com
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