Arthur Hayes also believes that Ethereum’s price could fall to $2,500.
The gradual uptick in the price of prominent cryptocurrencies from last month appears to have cooled amid the development of new regulations in both the UK and the US. BitMEX co-founder Arthur Hayes believes that another crypto carnage may just be around the corner.
In a recent blog post, Hayes stated that crypto-asset moves in tandem with the debt-based, “un-free” risk asset markets such as global developed market equities. Currently, the two largest cryptocurrencies, Bitcoin and Ethereum, were trading at $41,500 and $3,050, respectively. However, the exec asserted that the market is standing at the precipice of a “calamitous outcome” which could potentially trigger a drop down to $30,000 and $2,500 for the two assets by June.
Hayes said that this might become the case because the market perceives crypto and big tech in the same cesspool. The short-term correlations are high. And a tanking NDX would take crypto down with it. The exec added that selling fiat and buying crypto in advance of a big-tech meltdown, which could be somewhere between 30% to 50%, could lower the correlations across all time frames.
“The crypto capital markets are the only free markets left globally. As such, they will lead equities lower as we head into the downturn, and lead equities higher as we work our way out of it. Bitcoin and Ether will bottom well before the Fed acts and U-turns its policy from tight to loose.”
Hayes, who had recently pleaded guilty to violating the United States Bank Secrecy Act (BSA) in federal court, had earlier said that Bitcoin and Ethereum’s rally to $69,000 and $5,000 does not seem likely and foresaw a market trading sideways, with small bouts of downside volatility followed by a tepid recovery, a mostly accurate prediction.
He had earlier asked the investors to dump the fiat and instead hoard gold and Bitcoin. In his latest post, too, the former BitMEX exec stated that many “crypto market pundits” believe the worst is over, but they choose to “ignore the inconvenient truth that the crypto capital markets are currently just a 24/7 Spooo’s and Qqq’s indicator and do not trade on the fundamentals of being peer-to-peer, decentralized, censorship-resistant digital networks designed for the transfer of money.”
Having said that, Hayes is still confident about Bitcoin’s long-term potential and believes that it will reach $1 million on a three- to five-year horizon.