Arthur Hayes

‘No excuse’ not to long crypto: Arthur Hayes repeats $1M BTC price bet

Bitcoin and altcoins are a sure-fire bet ahead of a “great pivot” by the Fed on interest rates in 2024, Hayes believes.

Bitcoin (BTC) and altcoins are a no-brainer bet in the current macro climate, Arthur Hayes says.

In a post on X (Twitter) on Dec. 14, the former CEO of exchange BitMEX said that investors have “no excuse” to short crypto.

Going long crypto is the key to success as markets bet on the United States Federal Reserve lowering interest rates next year, Hayes argues.

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Elon Musk slams ‘heavy-handed’ Fed as ex-BitMEX CEO sees $1M BTC price

Bitcoin-friendly Musk is no fan of the Fed’s inflation policy, he reveals, as Arthur Hayes says U.S. economic decisions are sending BTC price on a path to $1 million.

The United States Federal Reserve has been “too heavy-handed” in taming inflation, said pro-Bitcoin (BTC) Tesla and Twitter CEO Elon Musk.

In a Twitter debate on March 29, Musk directly criticized U.S. macroeconomic policy, including “excess government spending.”

Musk: Fed policy is a “serious issue”

Bitcoin and crypto markets remain extremely sensitive to Fed cues on interest rate policy.

Despite inflation gradually coming down, the Fed has continued to hike rates even as banks feel the pressure and several collapses.

For Musk, this is already a case of going too far — with banking crisis contagion spreading to Europe, the U.S. dollar, he agrees, is quickly losing appeal.

In a response to a thread on dollar supremacy by Genevieve Roch-Decter, CEO of financial insights firm Grit Capital, Musk did not mince his words.

“Serious issue,” he wrote about the greenback potentially losing its status as the world’s reserve currency.

“US policy has been too heavy-handed, making countries want to ditch the dollar.”

His words come as various countries enact a shift away from U.S. dollar trade, these focused on China, which has begun transacting in yuan with foreign partners.

A further tweet from Musk added that the problem was made worse by the Fed, “Combined with excess government spending, which forces other countries to absorb a significant part of our inflation.”

Related: US enforcement agencies are turning up the heat on crypto-related crime

Markets remain split over how the Fed will act in the future. With the next rate hike decision not due for over one month, bets almost equally favor another 25-basis-point hike and a pause, according to data from CME Group’s FedWatch Tool.

Fed target rate probabilities chart. Source: CME Group

Fed fuels hyper-bullish BTC price bets

Some believe that given the severity of the banking crisis, the U.S. will have little choice but to reverse its policy.

Related: Bitcoin spikes above $29K as ‘fakeout’ fuels BTC price strength doubts

Among the most vocal is Arthur Hayes, former CEO of crypto exchange BitMEX, who earlier this month released a dedicated roadmap covering how he thinks events will unfold.

In one of several recent tweets, Hayes doubled down on the rosy future for Bitcoin as result, giving a price target of $1 million.

Amid regulatory attention for fellow exchange Binance, meanwhile, he described BTC price action in 2023 as a “bull market powered by FUD.”

BTC/USD traded at around $28,300 at the time of writing on March 30, according to data from Cointelegraph Markets Pro and TradingView.

BTC/USD 1-hour candle chart (Bitstamp). Source: TradingView

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

BitMEX co-founder Arthur Hayes proposes Bitcoin-based stablecoin

The proposed stablecoin, the Satoshi Nakamoto Dollar, aims to be entirely free from any movements of the U.S. dollar, which require banking services.

While United States regulators increasingly scrutinize stablecoins, the community continues to pitch new ideas for stablecoins independent of the U.S. dollar.

Arthur Hayes, co-founder and former CEO of BitMEX cryptocurrency exchange, has proposed creating a new stablecoin with a value pegged to the sum of $1 worth of Bitcoin (BTC) and one inverse perpetual swap of BTC against USD. He outlined the idea of the potential Satoshi Nakamoto Dollar (NUSD), or NakaDollar, in a blog post titled “Dust on Crust” on March 8.

Unlike major reserve-backed U.S. dollar-pegged stablecoins like Tether (USDT) and USD Coin (USDC), the proposed NakaDollar will not depend on any USD reserves, but solely upon derivatives exchanges that list liquid inverse perpetual swaps, Hayes said.

The proposed stablecoin would be explicitly based on a set of short BTC positions and USD inverse perpetual swaps, maintaining its 1:1 peg to the U.S. dollar via mathematical transactions between the new decentralized autonomous organization (DAO) — NakaDAO — authorized participants and derivatives exchanges.

The process of creating the NakaDollar stablecoin will be entirely free from any movements of USD, which require the services of banks, Hayes stated. He still noted that the proposed NUSD stablecoin would not be decentralized, adding:

“The points of failure in the NakaDollar solution would be centralized crypto derivatives exchanges. I excluded decentralized derivative exchanges because they are nowhere near as liquid as their centralized counterparts […]”

The news comes amid the owner of Silvergate Bank, a major crypto-focused bank in the United States, shutting operations and liquidating business amid the ongoing market downturn. The shutdown came quickly after the New York Department of Financial Services abruptly ordered the Paxos Trust Company to stop the issuance of Binance USD (BUSD), one of the largest U.S. dollar-pegged stablecoins on the market. As previously reported, Paxos held deposits in several banks, including Silvergate and Signature.

Related: ​​Stablecoins and Ether are ‘going to be commodities,’ reaffirms CFTC chair

Hayes is not alone in considering USD-independent stablecoins amid the ongoing pressure from regulators. In February, Binance CEO Changpeng Zhao suggested that the cryptocurrency industry will likely move to other fiat currencies as a base for stablecoins, including euro, yen, or Singapore dollars.

Crypto’s next bull run will come from the East: Gemini co-founder

Gemini co-founder Cameron Winklevoss believes the next crypto bull run will come from Asia, while America has two options — embrace crypto or be left behind.

Crypto’s next bull run will start in Asia, according to Cameron Winklevoss, an American investor and co-founder of crypto exchange Gemini.

His comments have come amid an increase in enforcement action and looming crackdowns from United States regulators, including the Securities and Exchange Commission.

“My working thesis atm is that the next bull run is going to start in the East,” Winklevoss said in a tweet on Feb. 19.

“It will be a humbling reminder that crypto is a global asset class and that the West, really the US, always only ever had two options: embrace it or be left behind.”

“It can’t be stopped. That we know,” he added.

According to Chainalysis, Central & Southern Asia and Oceania (CSAO) was the third largest cryptocurrency market in its index for 2022. Citizens from these areas received $932 billion in cryptocurrency value from July 2021 to June 2022.

CSAO was also home to seven of the top 20 countries in 2022’s index: Vietnam (1), the Philippines (2), India (4), Pakistan (6), Thailand (8), Nepal (16), and Indonesia (20).

In his Twitter thread, Winklevoss said that governments who fail to offer clear rules and sincere guidance on crypto will be “left in the dust,” and miss out on “the greatest period of growth since the rise of the commercial Internet,” adding:

“And it will mean missing out on shaping and being a foundational part of the future financial infrastructure of this world (and beyond).”

Winklevoss is neither the first, nor last, to suggest that the United States’ approach to crypto will drive away the industry, or that Asia could kick off the next crypto growth cycle.

Coinbase CEO and co-founder Brian Armstrong said the stringent actions from U.S. regulators, including the SEC, could further drive crypto businesses offshore.

Meanwhile, an independent market analyst on Twitter — known as GCR — has also prophesied that “China, (and Asia in general) will fuel the next run,” in a Jan. 8 post to their 147,300 followers.

“It will take quite some time to melt Western cynicism towards this space, but the East is ascending and yearning to flex.”

Arthur Hayes, the former CEO of crypto derivatives giant BitMEX, made a prediction last October that the next bull run will start when China moves back into the market and went one step further to say Hong Kong has a vital part to play in this process.

Hayes argued that Hong Kong might become the testing ground for Beijing to experiment with crypto markets and act as a hub for Chinese capital to find its way into the global crypto markets.

At the time, he said “China has not left crypto — it has just been dormant.”

Related: Hong Kong wants to become crypto hub despite industry crisis

Earlier this year, Hong Kong’s financial secretary, Paul Chan made a Jan. 9 speech at the POW’ER Hong Kong Web3 Innovators Summit, where he revealed lawmakers passed legislation to set up a licensing system for virtual asset service providers in December.

As a result of the changes in legislation, a “Chinese Coins Pump” narrative has been gaining traction as speculation grows over whether the regulatory easements in Hong Kong will lead to a massive surge for utility tokens of Asian focused exchanges.

Arthur Hayes bets on Bitcoin, altcoin surge in H1 2023 as he buys BTC

The ex-BitMEX CEO announces a BTC deployment “over the coming days” amid hopes that the good times will last for crypto until the middle of the year.

Bitcoin (BTC), Ether (ETH) and even nascent altcoins are a solid “buy,” a previously risk-off investor says.

In a blog post released on Feb. 8, industry stalwart Arthur Hayes announced a u-turn on his current crypto investment plans.

Hayes changes tune on “risky assets”

Current macroeconomic conditions stemming from the United States Federal Reserve previously made Arthur Hayes keen to avoid what he calls “risky assets.”

As inflation slows in tandem with the Fed’s rate hikes, multiple new storms are brewing in the U.S., and the Fed, Congress and the Treasury will steer the economy as they see fit, he says.

The problem is guessing how these events will play out over the course of the year. For Hayes, 2023 could well be split into two halves, with H1 being an ideal investment environment for crypto.

This runs contrary to a previous thesis from mid-January, in which the former BitMEX CEO said that he was staying on the sidelines for fear of a Fed-induced capitulation event hitting risk assets.

“My concerns about this potential outcome, which I handicapped would most likely happen later in 2023, has led me to keep my spare capital in money market funds and short-dated U.S. Treasury bills,” he explained.

“As such, the portion of my liquid capital that I intend to eventually use to purchase crypto is missing out on the current monster rally we’re seeing off of the local lows. Bitcoin has rallied close to 50% from the $16,000 lows we saw around the FTX fallout.”

Hayes continued that Bitcoin is likely far from done with its rebound despite 40% gains in January alone, comparing the risk asset environment to 2009 and the start of quantitative easing.

S&P 500 (SPX) annotated chart (screenshot). Source: Arthur Hayes/ Medium

This year, the picture is complex — quantitative easing has given way to quantitative tightening, where liquidity is removed from the U.S. financial system at risk assets’ expense.

However, H1 looks to be providing some relief, with some liquidity returning to avoid hitting the debt ceiling too soon. This could continue until Congress votes to raise the debt ceiling in the summer, which Hayes and others argue is inevitable.

Cash in the Treasury General Account (TGA) will be emptied to the amount of $500 billion, canceling the $100 billion monthly liquidity that the Fed is removing.

“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,” the blog post forecasts.

“Given that the Western-led fiat financial system would collapse overnight if the US 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.”

U.S. federal debt trends chart (screenshot). Source: U.S. Treasury

Looking out for macro “unwinding”

It is then that the tide will turn, and risk assets could become a thorn in the side of every investor once again.

Related: BTC price metric that cued biggest Bitcoin bull runs breaks out at $23K

It is all a matter of timing, Hayes believes. His plan is to move into U.S. dollar cash, from where a segue into select risk assets is possible. Top of the menu, it would appear, is Bitcoin.

“I’ll deploy over the coming days. I wish my size actually mattered, but it doesn’t — so please don’t think that when this happens, it will have any discernible effect on the price of the orange coin,” he told readers.

Going forward, however, altcoins represent a major opportunity, the blog post explains in its conclusion, with these likewise conditioned by timing.

“The key to shitcoining is understanding they go up and down in waves. First, the crypto reserve assets rally — that is, Bitcoin and Ether. The rally in these stalwarts eventually stalls, and then prices fall slightly,” Hayes wrote about crypto market cycles.

“At the same time, the shitcoin complex stages an aggressive rally. Then shitcoins rediscover gravity, and interest shifts back to Bitcoin and Ether. And this stair-stepping process continues until the secular bull market ends.”

Year-to-date, the total crypto market cap has gained around 34%, data from Cointelegraph Markets Pro and TradingView shows.

Total crypto market cap 1-day candle chart. Source: TradingView

Guiding the process in 2023, then, is the “unwinding” of the brief window of more accommodative economic conditions currently revealing itself in the U.S.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Arthur Hayes: Bitcoin bottomed as ‘everyone who could go bankrupt has gone bankrupt’

Former BitMEX CEO thinks the Bitcoin price could have reached the bottom after most of the “irresponsible entities” have all run out of Bitcoin to sell.

Arthur Hayes, the former CEO of crypto derivatives platform BitMEX, thinks the worst might be over for Bitcoin (BTC) this cycle as the “largest most irresponsible entities” have run out of BTC to sell.

“Looking forward, pretty much everyone who could go bankrupt has gone bankrupt,” he said in the Dec. 11 interview with crypto advocate and podcaster Scott Melker.

Hayes elaborates on his stance by explaining that when centralized lending firms (CELs) have financial troubles, they will often call in loans first, then sell BTC first because it operates as the “reserve asset of crypto” and “the most pristine asset and the most liquid:”

“When you look at the balance sheet of any of these of the heroes, there’s no Bitcoin on it because what do they do, they sold the Bitcoin as they were going bankrupt, they sold the Bitcoin during the wave before they went bankrupt.”

Hayes voiced a similar argument in a Dec. 10 blog post, explaining that while this “credit crunch is ongoing,” large physical sales of BTC are taking place on exchanges from both CELs trying to avoid bankruptcy and trading firms who have had loans recalled and must liquidate their positions.

“This is why the price of Bitcoin swoons before CELs go bankrupt. That’s the big move,” he said:

“I can’t demonstratively prove that all Bitcoin held by these failed institutions was sold during the multiple crashes, but it does look as if they tried their best to liquidate the most liquid crypto collateral they could right before they went under.”

Hayes believes the large-scale liquidations are at an end, though, explaining in the blog post that “There is no reason why you would hold on if you had an urgent need for fiat.”

Related: Hong Kong could be key for China’s crypto comeback — Arthur Hayes

Following the collapse of crypto exchange FTX and the subsequent fallout, the market is still deep in the grips of crypto winter, but Hayes believes the market could see some recovery in 2023.

“I believe the US Treasury market will become dysfunctional at some point in 2023 due to the Fed’s tightening monetary policies,” he said, adding: “At that point, I expect the Fed will turn the printer bank on, and then boom shaka-laka — Bitcoin and all other risk assets will spike higher.”

Hong Kong could be key for China’s crypto comeback: Arthur Hayes

Hayes says the next crypto bull run will be tied to when China embraces the crypto market again, and Hong Kong could be the gateway for this to happen.

Arthur Hayes, the former CEO of crypto derivatives giant BitMEX, believes the next crypto bull run will start when China moves back into the market, and Hong Kong has a vital part to play in this process. 

In his Oct. 26 blog post titled “Comeback,” Hayes outlined why he thinks the Hong Kong government’s announcement about introducing a bill to regulate crypto is a sign China is trying to ease its way back into the market. This could be because Hong Kong acts as “the proxy through which China interacts with the world:”

“When China loves crypto, the bull market will come back. It will be a slow process, but the red shoots are budding.”

Hayes argued that Hong Kong may become the testing ground for Beijing to experiment with crypto markets and act as a hub for Chinese capital to find its way into the global crypto markets:

“If these flows actually materialize in the way I imagine, they will be a strong supporting pillar of the next bull market.”

According to Hayes, Hong Kong’s “reorientation as a pro-crypto location” is a prong in Beijing’s strategy to reduce its position in a way that won’t destabilize its internal financial system.

Hong Kong was ranked the best-prepared country for widespread crypto adoption in a study by Forex Suggest published in July 2022. It considered several factors like crypto ATM installations, pro-crypto regulations and startup culture.

China has one of the largest economies in the world but has been mostly hostile toward the crypto industry. The country’s first ban came way back in 2013 when it prohibited banks from handling Bitcoin (BTC) transactions.

Beijing ramped up its crypto crackdown efforts in 2021 when it carried out multiple regulatory operations to eradicate Bitcoin mining from the country and deemed all crypto transactions illegal.

However, Hayes says, “China has not left crypto — it has just been dormant.”

Related: Possession of Bitcoin still legal in China despite the ban, lawyer says

China did resume BTC mining operations in September 2022, and Chainalysis noted in its 2022 Global Crypto Adoption Index that China re-entered the top ten this year after placing 13th in 2021.

The authors of the Global Crypto Adoption Index said they found the development “especially interesting” given the Chinese government’s crackdown on crypto, but according to their data, “the ban has either been ineffective or loosely enforced.”

BitMEX co-founder Benjamin Delo avoids jail, receives 30 months probation

Delo was allowed to leave the country to travel to Hong Kong where he is a resident, bringing to a close his part in the legal saga which began in 2020.

Benjamin Delo, co-founder of cryptocurrency exchange BitMEX, has been sentenced to 30 months probation for violating the Bank Secrecy Act (BSA), which is an Anti-Money Laundering (AML) law.

The sentence, handed down at a federal court in New York on Wednesday, follows his guilty plea to charges in February of “willfully failing to establish, implement and maintain an Anti-Money Laundering (AML) program” in his role at BitMEX.

Prosecutors had argued Delo should serve a year in prison or at least receive a two-year probation and six months of home detention, as was given to former CEO Arthur Hayes in May.

For Delo, his lesser sentence closes the legal saga which started in October 2020, which also saw co-founders Hayes, Samuel Reed and BitMEX’s first official employee Gregory (Greg) Dwyer, charged with similar violations.

Judge John Koeltl called Delo’s violations “very serious” and said that he knew BitMEX was breaking United States laws by not implementing an AML and Know Your Customer (KYC) regulations.

Judge Koeltl noted, however, that the exchange later took steps to rectify the issue and become compliant.

“When I look back, I see a fundamental failure to address a flaw in our systems,” Delo told the court, adding that he deeply regrets the actions that brought him in contact with the justice system and vowed that it would be his last brush with it.

As a citizen of the United Kingdom residing in Hong Kong, Judge Koeltl ordered Delo to be allowed to serve his probationary sentence in Hong Kong.

Related: The CFTC’s action against Gemini is bad news for Bitcoin ETFs

Judge Koeltl also took into consideration the fact that Delo paid a $10 million fine settling a court order from May in a civil case brought by the Commodity Futures Trading Commission (CFTC) for violating aspects of the Commodity Exchange Act.

A spokesperson for Delo’s legal team said after the sentencing hearing they’re pleased the court rejected “the government’s cynical attempt to exaggerate the seriousness of the Bank Secrecy Act charge in this case.

Delo’s lawyers said he intends to soon leave the U.S. for Hong Kong.

Meanwhile, Australian-born former BitMEX head of business development Greg Dwyer, who currently resides in Bermuda, is in talks with the New York federal court to extend a deadline for filing pre-trial documentation, according to the Sydney Morning Herald.

A letter sent to the court by Dwyer’s lawyer said “the parties continue to engage in discussions regarding a possible resolution to the matter.”

Is the bottom in? Raoul Pal, Scaramucci load up, Novogratz and Hayes weigh in

Some high-profile investors have taken the recent market downturn as an opportunity to add to their crypto positions, though others warn there’s still a risk of worse to come.

Some of the highest-profile investors in crypto believe that a crypto market bottom is fast approaching and the timing is right to buy — although one still warns of catastrophic outcomes should prices fall below established support levels. 

Billionaire Mike Novogratz, founder, chairman and CEO of digital asset merchant bank Galaxy Digital Holdings, told a Morgan Stanley conference on Monday that cryptocurrencies may be close to a bottom, with Ether (ETH) likely to hold at $1,000 and Bitcoin (BTC) at around $20,000 to $21,000.

The bottom for crypto would be realized faster than that of United States stocks, which could fall a further 15% to 20%, he said:

“Ethereum should hold around $1,000 and it’s $1,200 right now. Bitcoin is around $20,000, $21,000 and it is $23,000, so you are much closer to the bottom in crypto than you are where I think, stocks, are going to have another 15% to 20% decline.”

Hayes warns of sell-off risk

Arthur Hayes, co-founder and former chief of BitMEX, took a similar view, acknowledging on Twitter on Monday that on-chain data for wrapped Bitcoin (wBTC) and Ether indicated that “liquidations have mostly happened.”

However, Hayes warned that should support levels break for BTC and ETH at $20,000 and $1,000, respectively, we could expect “massive sell pressure in spot markets.”

Pal, Scaramucci loading up 

Macro investor Raoul Pal is taking the recent market downturn as an opportunity to add to his crypto positions. On Tuesday, Pal told his 956,000 Twitter followers that “we are in a buy zone” for Bitcoin, adding he was getting ready to “significantly” add to his crypto positions “probably starting next week and into July.” 

The former Goldman Sachs executive explained that the imminent Bitcoin bottom can also be signaled by the weekly Relative Strength Index (RSI), which is at 31, edging closer to its lowest ever at 28. 

RSI is a metric used by investors to measure the speed and magnitude of price changes, which can indicate overbought or oversold conditions. According to Investopedia, an RSI reading of 30 or below indicates an oversold and undervalued condition.

Pal said his framework frequently expects 60% drawdowns over the long-term time horizons, adding:

“In fact, the best way to optimize returns is to add significantly when the market tests the key trend.”

Anthony Scaramucci, founder of Skybridge Capital, told CNBC’s Squawk Box on Monday that investors should “stay disciplined” amid the crypto slump, noting that his fund has continued adding Bitcoin and Ether into its portfolio.

“With incremental cash coming into our fund we have bought more Bitcoin and Ethereum […] So yes, truth be told, people will look back on this debacle and say I wish I had fresh cash to buy into that.”

Related: ‘Too early’ to say Bitcoin price has reclaimed key bear market support — Analysis

Novogratz was less gung-ho about investing right now, taking a more conservative approach and telling attendees that it may not yet be time to “deploy lots of capital,” as the economy may have further to fall. 

“Until I see the Fed flinch, until I really think, OK the economy is so bad, and the Fed is going to have to stop hiking and even think about cutting, I don’t think it is time to really deploy lots of capital.”

Other metrics that could shed light on whether crypto is nearing its market bottom is the Fear and Greed Index, which as of June 15, is currently sitting at eight, under “Extreme Fear,” which was last seen on May 17, around the time of Terra’s collapse.

Bitcoin is currently priced at $22,061 and ETH is at $1,215 at the time of writing.