Arthur Hayes Predicts Bitcoin Rise After Short Position Exit
Date: 2024-09-09 Author: Henry Casey Categories: CRYPTO PAYMENTS
Arthur Hayes, former CEO of crypto exchange BitMEX, has closed his short position in Bitcoin after initially fearing a major correction over the weekend.
On September 6, Hayes warned that Bitcoin could fall below the psychological $50,000 mark over the weekend, opening a short position to profit from the decline.
To reassure investors, Hayes announced on September 8 that he was closing his short position in Bitcoin, expecting a potential rally as early as next week. He wrote in a post on X:
“Closed my $BTC short, made 3% profit — enough to pay for food and bar at KBW. If Jarlen continues to monitor the markets and makes a statement over the weekend, $BTC *MAY* rise in anticipation of more liquidity injection."
According to Hayes, Bitcoin could rise as early as next week, thanks to the Federal Reserve increasing its dollar liquidity. Weakness in the economy and financial markets could prompt the Fed to take such action.
Bitcoin Rising as US Dollars Are Printed
Anticipating more liquidity injections into the world's largest economy could significantly improve sentiment among crypto investors and boost Bitcoin.
A further decline in traditional markets could indeed trigger liquidity injections from the Fed, Hayes wrote in a September 7 post on X:
"If markets fall further, Jarlen will definitely 'turn on the printing press' and start printing more money."
M2 money supply, which accounts for all cash and short-term bank deposits in the U.S., could be the key to Bitcoin’s next rally, according to Real Vision chief crypto analyst Jamie Coates, who wrote in a May 16 post on X:
“This is due to its high correlation with $BTC bull cycles. Of the three key metrics I track in my model, global M2 reflects the most moves.”
However, it’s the rate of change in the money supply rather than its nominal value that matters, as “Bitcoin tends to move in sync with changes in M2 dynamics,” Coates added.
In early May, M2 money supply turned positive on an annualized basis for the first time since November 2023, which could signal that investors will soon start looking for inflation-proof assets like Bitcoin.
Bitcoin's September Correction Is in Line with Halving Bull Cycle: Analyst
Investor sentiment has soured this week after concerns about Bitcoin's correction below $50,000 have led to a state of "extreme fear" in the crypto market.
Despite the concerns, Bitcoin's decline in September is in line with previous halving cycles, popular analyst Rekt Capital wrote in a September 6 post on X:
"When BTC fell 7% in September 2021, it then rose 39% in October. Now Bitcoin is down 9% in September"
