Hayes Sees Bitcoin Support at $30K

Arthur Hayes, the former CEO of cryptocurrency exchange BitMEX, predicts a potential downturn for Bitcoin, with the price possibly dropping to $35,000 or lower due to various global macroeconomic factors. In his recent blog post titled “Yellen or Talkin’?” published on January 24, Hayes outlines a pessimistic short-term outlook for Bitcoin, despite its 75% gain compared to the previous year.

Hayes points to a combination of factors contributing to this forecast, including geopolitical tensions in the Red Sea impacting global shipping, dynamics of the U.S. presidential election, and the policies of the Federal Reserve. He highlights the potential for increased shipping costs to drive up inflation later in the year, a scenario the Federal Reserve and its Chair, Jerome Powell, are likely to address. Hayes suggests that Powell may publicly advocate for rate cuts without actually implementing them, to curb inflation spurred by shipping costs and other factors.

Moreover, Hayes discusses the precarious state of the U.S. regional banking sector post the March 2023 meltdown. He references the Bank Term Funding Program (BTFP), a government support measure set to expire, and questions the future actions of Treasury Secretary Janet Yellen in this context. Hayes posits that a financial crisis could overshadow inflation concerns, potentially leading to bank failures if the BTFP is not renewed.

In light of these economic and geopolitical risks, Hayes argues that the recent 20% dip in Bitcoin’s price might just be the beginning. He forecasts a possible 30% correction from the high of $48,000 seen after the ETF approval, setting a support level for Bitcoin between $30,000 and $35,000. Reflecting his belief in this prediction, Hayes mentions his purchase of $35,000 strike puts for March 29, 2024, viewing any drop below $35,000 as an opportunity to buy the dip.