Former Bitmex Chief Predicts 30% BTC Correction — Warns Spot Bitcoin ETFs Could Make It Worse

Former Bitmex CEO Arthur Hayes is cautioning astir a imaginable 30% correction successful the bitcoin market. “The washout could beryllium adjacent much terrible if the slate of U.S.-listed spot bitcoin ETFs has already commenced trading,” helium warned. “I could easy spot a 30% to 40% correction owed to a dollar liquidity rug pull.”

Ex-Bitmex Chief’s Bitcoin Predictions

Former Bitmex CEO Arthur Hayes outlined his bitcoin terms forecast successful a Medium station published past week. He besides discussed the interaction of spot bitcoin exchange-traded funds (ETFs) connected the terms of bitcoin. The U.S. Securities and Exchange Commission (SEC) is expected to o.k. aggregate spot bitcoin ETFs aboriginal adjacent week.

Noting that helium expects 3 variables to “collide with each different successful March,” the erstwhile Bitmex brag predicts:

I expect bitcoin to acquisition a steadfast 20% to 30% correction from immoderate level it has attained by aboriginal March. The washout could beryllium adjacent much terrible if the slate of U.S.-listed spot bitcoin ETFs has already commenced trading.

The archetypal adaptable is the Fed’s Reverse Repurchase Operations (RRPs) oregon revere repo. Hayes expects the RRP equilibrium to deed $200 cardinal successful aboriginal March. Noting that the marketplace volition past “wonder what is next,” helium emphasized: “There needs to beryllium different root of dollar liquidity supplied to support the enactment going.” Secondly, helium said that connected March 12, “the broke banks indispensable find the currency to swap with the U.S. Treasuries and different eligible bonds they repo’d with the Fed.” Another origin concerns whether the Fed volition chopped involvement rates astatine the Federal Open Market Committee (FOMC) gathering connected March 20. He opined: “Currently, the marketplace expects the Fed to initiate its archetypal complaint chopped of astatine slightest 0.25% since it started raising rates successful March of 2021.”

As for spot bitcoin ETFs, Hayes described: “Imagine if the anticipation of hundreds of billions of fiat flowing into these ETFs astatine a aboriginal day propels bitcoin supra $60,000 and adjacent to its 2021 all-time precocious of $70,000. I could easy spot a 30% to 40% correction owed to a dollar liquidity rug pull.” Proposals to database and commercialized 11 spot bitcoin ETFs person been filed with the SEC, and trading could commencement arsenic soon arsenic Jan. 11.

“As galore of you know, I person a divers crypto portfolio. My biggest positions are bitcoin and ether, representing ~70% of my portfolio. The different shitcoins I ain are overmuch little liquid, and successful particular, the liquidity of the derivatives connected these shitcoins is poor. Therefore, if I privation a liquid macro crypto hedge, I indispensable usage bitcoin derivatives,” helium shared. The erstwhile Bitmex enforcement concluded:

If my forecasts are correct, the marketplace volition commencement meaningfully correcting astir March 12th.

What bash you deliberation astir the predictions by erstwhile Bitmex CEO Authur Hayes? Let america cognize successful the comments conception below.