As an analyst with over two decades of experience in global finance and a deep understanding of the cryptocurrency market, I find Arthur Hayes’ insights particularly intriguing. His perspective, honed from his stint as co-founder of BitMEX, offers a unique blend of traditional finance and crypto market analysis.
Arthur Hayes, a co-founder of BitMEX, has disclosed his substantial investments in Ethereum (ETH), Ethena (ENA), and Pendle (PENDLE). He also voiced his belief that the upcoming Ethereum bull market is promising. During the Token2049 event held in Singapore, Hayes discussed how potential adjustments in interest rates by the U.S. Federal Reserve might influence the cryptocurrency market.
In his speech titled “Macroeconomics Current Events: My Perspective,” Hayes drew a parallel between earning 5% from Treasury Bills (T-bills) and investing in cryptocurrencies. He emphasized that the anticipated reduction in interest rates by the Federal Reserve on September 18, marking its first such move in four years, could bring about substantial consequences.
Hayes criticized the Fed for contemplating rate cuts while the U.S. government continues to issue large amounts of dollars and increase spending. “The Fed is making a colossal mistake,” Hayes warned.
He thinks that these reductions will eventually cause the market to crash, even though there was initial enthusiasm. In his opinion, reducing interest rates by 0.50 to 0.75 percentage points could trigger a market slump because it would decrease the difference in interest rates between the US dollar and the Japanese yen.
A previous executive at BitMEX pointed out that the dynamics between the US dollar and Japanese yen are vital. Recalling a recent monetary crisis where the yen’s value plummeted dramatically, leading to financial strain, he suggested a repeat of such circumstances could occur if the Federal Reserve goes ahead with its interest rate reductions.
Besides discussing the influence of Treasury Bill rates on cryptocurrencies, Hayes elucidated how Treasury Bill yields, currently around 5.5%, are drawing investors away from riskier decentralized finance (DeFi) ventures. Despite this, he maintains a positive outlook for Ethereum, likening it to an “internet bond” that offers a return of approximately 4%. He foresees a potential resurgence in the Ethereum bull market if interest rates significantly decline.
As rates decline, Ethereum becomes money, Hayes said. “We could reignite the Ethereum bull market.”
Despite Ethereum’s recent underachievement relative to Bitcoin, Hayes maintains an optimistic viewpoint. He is certain that Ethereum will benefit when market circumstances ultimately favor it, particularly following the Federal Reserve’s forthcoming interest rate decision.
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2024-09-18 14:44