Why This Crypto Exchange Founder Believes Bitcoin
Bitcoin’s price has fluctuated over the past month, but BitMEX co-founder Arthur Hayes is the latest cryptocurrency expert to issue a bullish forecast for the asset. According to the former CEO of cryptocurrency exchange BitMEX, Bitcoin could reach $70,000, and the only reason the asset isn’t at that price yet is because investors are fixated on the Fed’s nominal rate.
Bitcoin Can Still Rise 150%
There have been various predictions regarding Bitcoin, with some more optimistic than others. As for Hayes, he made his case for BTC in his post on the Crypto Trader Digest blog in light of various actions by the US Federal Reserve to curb inflation.
Related reading: This latest move suggests the SEC lawsuit against Ripple is pushing the crypto firm out of the US
Since March 2022, the Fed has raised interest rates several times, causing many investors like Hayes to reevaluate their predictions about Bitcoin’s outlook.
Get the JACKPOT with 55 FREE SPINS. Register today and use your bonus.
570% up to 12 BTC + 300 free spins for new players and 1 BTC in bonuses every day, only on Wild.io. Play now!
What happens if the Fed keeps raising rates? Can the $BTC bull market gain steam? “Are we there yet?” is an essay exploring this question. https://t.co/OGkVQreIBg pic.twitter.com/FTYR3HBq1a
— Arthur Hayes (@CryptoHayes) September 11, 2023
In a blog post, Hayes shared several metrics regarding U.S. Treasury yield and GDP growth. Hayes began to modify his forecasts by challenging the widely held belief that the value of BTC is negatively correlated with rising interest rates.
The new outlook shows that the level of government spending and current GDP growth have pushed the real Treasury yield on 5% Treasuries closer to 4%, making risky assets like BTC and stocks still attractive.
Hayes believes the Fed will be able to continue on this rate hike path, and the search for positive real yields in response has translated into the bull market in Bitcoin that began in March 2023.
BitStarz Player Takes Record Winning $2,459,124! Could you be the next big winner?
However, although Bitcoin is up nearly 29% since then, most of the market is still not catching on as everyone is focused on the Fed’s nominal rate and not the real rate.
“The reason we’re not at $70,000 is because everyone’s focus is on the Fed’s nominal rate and not the real rate compared to the eye-wateringly high nominal GDP growth in the US.”
Bitcoin price chart from Tradingview.com
BTC price hovers above $26,300 | Source: BTCUSD on Tradingview.com
BTC price at $70,000?
During an appearance at Korea Blockchain Week, Hayes mentioned that the next Bitcoin bull market began on March 10, the day the Federal Deposit Insurance Corporation (FDIC) took over Silicon Valley Bank (SVB).
Indeed, Hayes made similar predictions about Bitcoin. In March 2020, a pundit predicted that Bitcoin could rise from $8,000 and reach $20,000 by the end of the year. The BTC price would later close 2020 at around $27,000.
Related Reading: SEC Chief Gary Gensler Wraps Up Senate Hearing: Here’s What Crypto Investors Should Know
The BitMEX co-founder has previously expressed his discomfort with Spot Bitcoin ETFs from investment firms like BlackRock, calling them “crypto gatekeepers” who are only trying to balance their deposit base. However, Hayes believes that market catch-up would see Bitcoin survive another Fed rate hike and skyrocket to more than 150% from current levels by early 2024.