The co-founder and former CEO of Bitmex, Arthur Hayes, has published a new blog post concerning the current state of cryptocurrency markets. Hayes says currently there’s an inability to recognize the cyclical nature of markets and the “inconvenient truth” that is crypto is now moving in “lockstep” with market equities. Hayes expects the Nasdaq 100 (NDX) to experience a significant 30% to 50% drawdown and leading crypto assets like bitcoin and ethereum to drop in value too, amid a great deal of stock market carnage.
While the long-term outlook for the crypto market was bright, the Bitmex co-founder’s short-term outlook is scary
The crypto economy fell below the $2 trillion mark on Monday, slipping 4.7% to $1.98 trillion. The slowdown is attributed to expected rate hikes by the Federal Reserve, with economists saying the U.S. central bank should “offer two consecutive half-point interest rate hikes in May and June,” according to a Reuters poll. Economists surveyed also predict that the probability of a recession occurring next year is 40%. Following a blog post published in mid-March, Bitmex co-founder Arthur Hayes wrote some new near-term predictions.
The last blog post on March 16 explained that Hayes believes the end of the “Petro Dollar / Euro Dollar monetary system” is drawing closer. Hayes also said that he predicted gold’s value could reach $10K per ounce while bitcoin (BTC) marches to $1 million per coin. However, the blog post published on April 10 paints a different picture, as Hayes is predicting a crypto market downturn. Via the blog post and sharing a great number of charts, Hayes shows that bitcoin (BTC) and crypto markets, in general, are very correlated with stocks at the moment.
Hayes expects the Nasdaq 100 (NDX) to shake and he believes the crypto markets will follow in tandem. He speculates that the NDX will fall by around 30% or even as much as 50%, but he is not sure. Hayes is clear, however, that the Federal Reserve has ended monetary easing practices and the time is over. “[NDX] down 30%? … Down 50%? …your guess is as good as mine,” Hayes said Sunday. “But let’s be clear – the Fed isn’t planning to expand its balance sheet again anytime soon, which means stocks aren’t going higher,” the Bitmex co-founder added.
Crypto Derivatives Exchange Co-Founder’s Predictions: Bitcoin $30,000, Ethereum $2,500
Hayes thinks that the crypto economy will follow suit with U.S. technology stocks and will drop significantly lower in value in the coming months. The crypto derivatives exchange co-founder highlights that there are “many crypto market pundits who believe the worst is over” but he believes they “ignore the inconvenient truth.” While Hayes predicts the NDX will slide by 30% or even 50% lower, he predicts bitcoin (BTC) will drop to $30K per unit. Hayes also expects the second leading crypto asset, ethereum (ETH), to slide to $2,500 per unit. The numbers Hayes came up with stem from what he believes and not from a technical analysis standpoint.
“There’s not much science to these numbers, other than a hunch,” Hayes writes. “What’s annoying is that there are a number of altcoins that I’ve started hoarding because the prices are quite attractive. Even though some of these coins are already down 75% from their all-time high, I don’t think they can escape the crypto carnage to come.As such, I’m buying June 2022 crash stakes on both bitcoin and ether.
Hayes ends his blog post by saying that of course, his “market prognosis might be wrong” and he is fine with that. If he is wrong then he only loses the premium he paid on crash protection. “I will be wrong if the correlation between bitcoin / ether and NDX starts dropping before a crash in risk asset markets,” Hayes’s blog post concludes. “I’m perfectly okay with that outcome, as I’m already in a long crypto position.”
