Exodus from US Banks and Bullish Future for Bitcoin, Arthur Hayes Predicts
According to BitMEX founder Arthur Hayes, US banks are bracing themselves for another blow as businesses seek to outperform the prevailing low-interest rates.
In a recent essay, Hayes believed that the ongoing exodus from the US banking system will worsen. Statistical data from the Federal Reserve Economic Data (FRED) system reveals that depositors withdrew a substantial $30 billion from American bank accounts between May 10th and May 17th, marking an increase of over $4 billion from the previous week.
Comparing the current deposit total of $17.15 trillion to the $18.03 trillion recorded a year ago, it is evident that a significant shift has occurred.
Hayes suggests that the allure of high rates offered by money market funds investing in US treasuries will likely lead to another wave of withdrawals from investors and businesses searching for more lucrative returns. He highlights that over $1 trillion has already been withdrawn from the US banking system since last year, raising the critical question of whether this trend will persist.
Individuals and businesses seem inclined to move their funds from bank accounts yielding 0% interest to money market funds with returns as high as 5% or 6%. The ease and convenience of utilizing smartphone banking further contribute to this inclination.
Hayes makes predictions about the future of Bitcoin, asserting that he expects it to remain stable without revisiting the $20,000 mark. He believes that a strong support base will develop as money gradually flows into global risk assets.
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Notably, Hayes observes that trading volumes and volatility often decline during the summer months in the northern hemisphere, leading to a temporary decrease in crypto trading activity. However, he plans to take advantage of this period of relative calm to gradually increase his allocation to Bitcoin once the US Treasury’s General Account is replenished.
Furthermore, Hayes predicts that as more experts discuss the implications of the vast amounts of money being printed by the Federal Reserve and US Treasury, the common understanding of the money printer’s impact will resurface.
He suggests that this knowledge will result in Bitcoin experiencing significant growth as the relationship between money printing and cryptocurrency becomes more widely recognized.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
