Billionaire Arthur Hayes has expressed caution regarding the upcoming Bitcoin halving and its potential impact on the price of the asset. Despite the common belief that the halving will lead to a surge in crypto prices, Hayes believes that there might actually be a negative price action before and after the event. He points out that when the market consensus leans heavily towards a particular outcome, the opposite often occurs. Hayes is also concerned about the scarcity of US dollar liquidity around the time of the halving, which he believes will fuel a sell-off of crypto assets. As a result, he has decided to abstain from trading until May, when the Federal Reserve is expected to discuss a potential reduction in its Quantitative Tightening program. Hayes sees May 1 as a turning point for risky assets and a return of liquidity as the Fed takes measures to boost asset prices.
Despite Hayes’ cautious view, other industry executives such as Ripple CEO Brad Garlinghouse remain optimistic about the cryptocurrency market. Garlinghouse predicts that the total market value of cryptocurrencies will double this year, largely driven by spot ETFs and the Bitcoin halving. He believes that the introduction of real institutional money through ETFs is a significant factor contributing to this positive outlook. Similarly, Matteo Greco, a research analyst at digital asset firm Fineqia International, expects Bitcoin to reach $75,000 by the halving event. He notes that historically, BTC halving events have marked significant points followed by uptrends lasting 9-18 months. Additionally, investors have poured a total of $646 million into crypto products, pushing the year-to-date inflows to an unprecedented $13.8 billion, surpassing the previous year’s total of $10.6 billion.
While Hayes does not plan to short the market outright, he has closed profitable positions in various cryptocurrencies and intends to stay in a no-trade zone until May 1. He hopes to return in May with dry powder ready to deploy to position himself for the expected bull market. Hayes believes that the tightness of US dollar liquidity at the estimated halving date will add impetus to the selling of crypto assets, but he is anticipating a change in the Quantitative Tightening program that will provide a more favorable environment for risky assets after May 1. Despite his cautious stance, Hayes is hopeful for a positive turn in the market post-halving.
In contrast to Hayes’ view, other crypto veterans and industry executives like Brad Garlinghouse remain optimistic about the market outlook. Garlinghouse predicts that the total market value of cryptocurrencies will double this year, largely driven by factors such as spot ETFs and Bitcoin halving. He emphasizes the influx of real institutional money through ETFs as a significant contributing factor to the positive outlook. Additionally, Matteo Greco from Fineqia International expects Bitcoin to reach $75,000 by the halving event, citing historical trends that indicate significant uptrends following halving events. The influx of investor funds into crypto products is also at an all-time high, reflecting growing interest and optimism in the market.
Hayes’ cautious view on the Bitcoin halving and its potential impact on the market is rooted in his observation of market dynamics and US dollar liquidity scarcity. He believes that the prevailing narrative of the halving leading to a price rally may not necessarily play out as expected due to market dynamics. Hayes has chosen to remain on the sidelines until May, anticipating a change in the Quantitative Tightening program that will provide a more favorable environment for risky assets. While Hayes has decided to abstain from trading for the time being, other industry executives like Brad Garlinghouse and Matteo Greco hold optimistic views on the market, expecting significant growth driven by factors such as spot ETFs and historical trends following halving events. Despite differing opinions, the overall sentiment in the cryptocurrency market remains positive, with investor interest and inflows into crypto products on the rise.
