Arthur Hayes, the co-founder of BitMex, sees Bitcoin’s price dropping by 30% in the short term, just two weeks after the launch of a Bitcoin ETF spot fund, and considers it a “warning sign.”
Hayes emphasizes the correlation between Bitcoin’s recent local high and the 2-year US Treasury bond yields hitting a local low of 4.14% this month, indicating a gradual increase in yields.
In a recent blog post, Hayes dismisses the common argument that the recent Bitcoin price decline is due to capital outflows from the Grayscale Bitcoin Trust (GBTC). He argues that this claim doesn’t hold true when you consider the net inflow of funds into newly-listed Bitcoin ETF spot funds, which amounted to $820 million as of January 22nd.
On the other hand, Cafebitcoin recently reported that since the approval of Bitcoin ETF spot funds, Grayscale has witnessed outflows of over $3.3 billion. However, Hayes points out the possibility that the Term Asset-Backed Securities Loan Facility (TALF) program not being extended could be a factor leading to negative investor sentiment.
TALF is a government-initiated program in the United States aimed at ensuring banks have enough liquidity to meet the needs of businesses and households.
The decision to extend TALF is set for March 12th, and Hayes predicts that Bitcoin’s price will continue to decline until that decision is made. However, he anticipates a trend reversal following the expected announcement, with Bitcoin’s price increasing.
At the time of writing, the price of Bitcoin is trading at $42,157.
Hayes is known for his specific and optimistic predictions when discussing Bitcoin. In July 2023, he forecasted that decreasing interest rates, the Bitcoin halving event, and the introduction of Bitcoin ETF spot funds would push Bitcoin’s price to $70,000 by the end of 2024, saying, “That’s when the real excitement begins. That’s when the price market truly takes off.”
Furthermore, his optimism extends to 2026, where he envisions Bitcoin’s price ranging from $750,000 to $1 million. He is not the only one making six-figure price predictions recently.
Messari, an analysis firm, predicts Bitcoin will reach $600,000 by the end of the year, while VanEck predicts $275,000, and ETC Group forecasts $100,000.