Arthur Hayes Predicts Crypto Crash from Fed Interest Rate Cuts

Crypto billionaire Arthur Hayes on Wednesday mentioned Fed rate of interest cuts will crash Bitcoin and the crypto market. The feedback got here on the main crypto occasion Token2049. The US Federal Reserve is predicted to chop charges between 25-50 bps, with markets anticipating a 50 bps lower amid slowing inflation and the labor market.

Arthur Hayes Says Fed Charge Reduce Will Crash Crypto Market

Throughout a speech on the Token2049 occasion on September 18, BitMEX co-founder Arthur Hayes talked in regards to the macroeconomic traits akin to Fed charge cuts and its impression on the crypto market.

He believes the US Federal Reserve’s rate of interest lower can crash markets, together with Bitcoin value and crypto market. He added that there’s a 60-70% odds of a 50 bps charge lower, however it will likely be a giant mistake by the Fed underneath present situations. In response to CME FedWatch tool, there’s a 65% likelihood of a 50 bps charge lower after the FOMC assembly in the present day.

Arthur Hayes asserts the markets will collapse inside just a few days as it should slim the rate of interest hole between the US greenback and the Japanese yen. The unwinding of Yen carry trades by hedge funds and massive traders virtually triggered a small monetary disaster as Financial institution of Japan hiked rates of interest.

CoinGape Media additionally supplied an identical outlook as Hayes. The report revealed that economists count on a rate hike by BOJ as early as October.

Spend money on Treasury Payments And Ethereum

Arthur Hayes mentioned he has loved a return of round 5.5% from Treasury payments for greater than a 12 months after the Fed stopped elevating rates of interest. Whereas property having yield lower than Treasury payments have failed to draw traders. He claims that is the rationale why ETH value has remained low.

The US greenback index (DXY) fell to a low of 100.74 in the present day. The US 10-year Treasury yield held round 3.64%, hovering close to 15-month lows as traders braced for the upcoming Federal Reserve financial coverage resolution.

Nonetheless, Ethereum will grow to be extra enticing if Treasuries fall after Fed charge cuts, which he issues to occur. Hayes recommends shopping for Ethereum, Pendle, Ethena’s USDe and others.

“That you must purchase treasury bonds, we are going to purchase them, put them in some authorized construction, after which provide you with a certificates that pays curiosity.”