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Arthur Hayes, the co-founder and former top executive of BitMEX, forecasts that the broader financial market will start feeling the ripple effects of Bitcoin's six-month rise in the next half year to a year. He offered this analysis during his keynote address at Korea Blockchain Week on September 5.
Hayes traces the uptick in Bitcoin's value back to March 10, a significant date when the Federal Deposit Insurance Corporation assumed control of Silicon Valley Bank. This occurred during a turbulent week in which Silvergate Bank liquidated on March 8, followed by the shutdown of Signature Bank by New York authorities on March 12. These financial events prompted the Federal Reserve to launch the Bank Term Funding Program (BTFP). The program was designed to offer year-long loans to banks in exchange for qualifying assets to stabilize the financial sector.
Hayes likened the Federal Reserve's actions to an emergency backstop for the struggling banking industry, effectively exchanging problematic bonds for new dollar bills. Since the initiation of BTFP, Bitcoin's value has gone up by approximately 26%, a metric that Hayes identifies as the starting point of the cryptocurrency's current bullish trajectory. This financial atmosphere led investors to pivot toward finite assets like Bitcoin, he explained.
However, according to Hayes, the broader market has not yet reacted to Bitcoin's performance. He suggests that this lag in response will cease in the next six to twelve months. Despite any potential actions from the Federal Reserve and other central banks—be it hiking interest rates to tighten the economy or flooding the market with new money—Hayes believes Bitcoin is well-positioned to thrive.
He concluded by stating that regardless of the Federal Reserve's course of action, whether increasing or cutting rates, the cryptocurrency sector at large is poised for resilience and growth.
