Bitcoin Rally Incoming Amid Banking Crisis, Arthur Hayes

Arthur Hayes, the co-founder of BitMEX, a popular cryptocurrency derivatives exchange, is predicting a massive Bitcoin and crypto rally as the US banking system continues to face crises.

In a series of tweets, Hayes says he believes that the Biden Administration’s efforts to contain the contagion from spreading through the banking system will ultimately result in the Federal Reserve having to completely halt its rate hikes and inject money back into the system. This, in turn, will pave the way for an influx of capital into risk assets and particularly the crypto markets, according to Hayes.

The prediction comes as the US banking crisis persists, with investors scrambling to reassess their portfolios and individuals and corporations examining the safety of their assets within the nation’s regional banks. Shares of First Republic Bank, for instance, were down 75% on Monday, reflecting the growing concerns about the banking sector’s stability.

Hayes believes these developments’ outcome is already clear: “Are you ready for the mother f***ing bull market?” he asks in a tweet.

“45 minutes into the US [market] open, and banks getting halted left, right and center. […] Get ready for a face ripping rally in risk assets. MONEY PRINTER GO BRRR!!!”

That's a fucking savage move in the 2yr. In case you think this is something other than what it is. The bond market is saying it's back to print dat money mode. Don't fight the Fed!!!! pic.twitter.com/dPWQeHt9j9

— Arthur Hayes (@CryptoHayes) March 13, 2023

Bitcoin, which was built to be a decentralized, self-powered bank in cyberspace without the need for a middleman, is already soaring amid the banking crisis. The cryptocurrency has jumped from a Friday low of $19,662 to a high of $24,851 at the time of publishing, representing a stunning 26% turnaround.

On Sunday, the Biden Administration announced that it would backstop all depositors at the failed Silicon Valley Bank and the newly shuttered Signature Bank and ensure everyone can get their money out.

The move is designed to reassure the American public that the money they hold in their bank accounts is safe and that even accounts holding more than the FDIC-insured amount of $250,000 will remain intact.

Regional American banks are failing due to fears about their investments in US bonds, which are designed to maintain a stable value and offer institutions a safe way to diversify and earn yield. However, the value of those bonds has plummeted amid the Fed’s series of aggressive rate hikes, exacerbating concerns about the banking system’s health. The Fed has created a separate facility designed to offer loans for up to one year to institutions affected by the bank failures.

Despite these developments, Hayes sees a silver lining for the crypto markets. He believes the Fed’s eventual decision to inject money back into the system and halt rate hikes will create a favorable environment for risk assets, including cryptocurrencies. If Hayes’ prediction proves accurate, we could see a significant surge in Bitcoin and other cryptocurrencies in the near future.

Author

Andrey Kunev

Reporter at CoinsPress

Andrey Kunev is a knowledgeable cryptocurrency content creator passionate about the crypto market. With extensive experience in market analysis and investment reporting, Andrey is a valuable asset to the CoinsPress team. As a frequent contributor, he offers insightful and comprehensive coverage of market trends, price fluctuations, and new advancements in cryptocurrency. Whether you're a seasoned investor or just getting started, Andrey's clear and concise writing offers a comprehensive look at the current state of the crypto market and its prospects. Stay up-to-date with CoinsPress's expert analysis and commentary on all things cryptocurrency.