Bitcoin (BTC) has experienced a sustained bull run over the past six months, and according to BitMEX co-founder and former CEO Arthur Hayes, the market is yet to respond. However, Hayes believes that this response will come within the next six to 12 months.
Speaking at Korea Blockchain Week on September 5th, Hayes argued that Bitcoin’s bull run began on March 10th, the day Silicon Valley Bank (SVB) was taken over by the Federal Deposit Insurance Corporation (FDIC). This event was preceded by Silvergate Bank going into liquidation on March 8th, and followed by the forced closure of Signature Bank by New York regulators on March 12th.
In response to these collapses and in an effort to prevent further financial instability, the Federal Reserve established the Bank Term Funding Program (BTFP). This program offered banking loans of up to a year to banks that posted “qualifying assets” as collateral.
Hayes explained that the Fed essentially backstopped the entire banking system by accepting “underwater dogshit bonds” in exchange for fresh dollars. He asserted that this move indicated that the Fed was acknowledging its role in causing the financial problem and was opting to fix it by printing more money.
Since then, Bitcoin’s price has seen a significant increase, currently standing at around 26%. Hayes believes that this price surge on March 10th marks the beginning of the bull market. He argued that this development exposed the lack of concern for the value of fiat currencies, leading traders to seek out fixed-supply assets like Bitcoin.
Despite the lack of response from the rest of the market thus far, Hayes predicts that it will catch up within the next six to 12 months. He stated that even if the Fed and other central banks continue with interest rate hikes or further quantitative easing, Bitcoin will continue to perform well.
“In both scenarios, whether the Fed raises or cuts, we are in a good position as the cryptocurrency industry,” Hayes said.
The article concludes by highlighting the anticipation of the market’s response to Bitcoin’s bull run and the potential impact of future actions by central banks. It also offers a link to a related article on how to protect one’s crypto assets in a volatile market.
Overall, Hayes’ analysis suggests that Bitcoin’s bull market began in March and that the market will eventually catch up to this trend. His belief in the strength of Bitcoin in various economic scenarios reflects the growing confidence in cryptocurrencies as alternative investments.
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