Bitcoin
BTC
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The bitcoin price, down around 50% from this point last year, has added 30% since the beginning of 2023, branded a “year of opportunity.” Ethereum
ETH
BNB
XRP
Now, as the U.S. Federal Reserve plays havoc with the bitcoin price and crypto market, legendary trader and former BitMex chief executive Arthur Hayes has changed his tune on bitcoin’s short-term fortunes—revealing he’ll be making a bitcoin deployment “over the coming days.”
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The bitcoin price has swung wildly over the last few weeks with the ethereum price and other major … [+]
“I’ll deploy over the coming days,” Hayes wrote in a blog post, adding that “if bitcoin and ethereum continue to rally, there will definitely be a” rally in smaller cryptocurrencies “over the next few months.”
Last month, Hayes warned that “risk assets” such as bitcoin, ethereum and technology stocks could “get smoked” in 2023 due to a “disastrous global financial meltdown.”
Last year, the Fed began raising interest rates and drawing down its balance sheet in an attempt to stamp out soaring inflation. Recent consumer price data has caused some to bet the Fed has already won the war against inflation and will pivot to a more dovish stance later this year.
Despite the Fed removing “$100 billion per month [from its balance sheet] which is negative for risk,” Hayes pointed to the Treasury’s $500 billion “checking account” as potentially canceling out Fed tightening.
“The Treasury will draw down the Treasury general account (TGA) to zero due to the debt ceiling being hit,” Hayes wrote, predicting it’s inevitable that Congress will vote to raise the debt ceiling in the summer to prevent a U.S. debt default.
“The TGA will be exhausted sometime in the middle of the year. Immediately following its exhaustion, there will be a political circus in the U.S. around raising the debt limit,” Hayes wrote. “Given that the Western-led fiat financial system would collapse overnight if the U.S. government decided to forgo raising the debt ceiling and instead defaulted on the assets that underpin said system, it’s safe to assume the debt ceiling will be raised.”
However, traders should “get out of the market” when the “TGA hits zero,” Hayes added.
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The bitcoin price has crashed back from its recent highs, dragging down the price of ethereum, BNB, … [+]
Meanwhile, bitcoin, ethereum and crypto prices have retrenched after parsing the week’s economic headlines.
“Traders and investors continued to reposition after last Friday’s strong employment data, and Powell’s non-committal comments at the Economic Club event on Tuesday did nothing to change the trend,” market watcher Noelle Acheson wrote in a blog post.