TL;DR
- Altcoin Revival Dependent on Bitcoin and Ethereum: Arthur Hayes predicts altcoins will only see a resurgence if Bitcoin surpasses $70,000 and Ethereum breaks $4,000, driven by structural support from ETF inflows.
- Solana’s Potential and Market Impact: Hayes is optimistic about Solana reaching $250 but notes its market impact is less significant than that of Bitcoin and Ethereum due to their larger market caps.
- Liquidity and Market Manipulation: Hayes expects a liquidity-driven rally in Bitcoin and Ethereum by year-end, with potential market manipulation by Treasury Secretary Janet Yellen in October, setting the stage for an altcoin surge.
Former BitMEX CEO Arthur Hayes has made a bold prediction regarding the future of altcoins. In a recent blog post, Hayes stated that altcoins will not experience a significant resurgence until Bitcoin surpasses $70,000 and Ethereum breaks through the $4,000 mark.
Despite recent market corrections, Hayes believes that both Bitcoin and Ethereum have shown remarkable resilience, largely due to structural support from inflows into U.S.-listed exchange-traded funds (ETFs).
“During this cycle, Bitcoin and now Ether have structural bids in the form of net inflows into US-listed exchange-traded funds (ETF),” Hayes wrote.
Hayes also expressed optimism about Solana, predicting that it could resume its uptrend and reach over $250. However, he noted that the market-wide impact of a Solana rally would be less significant compared to the wealth effect generated by Bitcoin and Ethereum, due to their larger market capitalizations.
Anticipating an Alt Season
According to Hayes, a dollar liquidity-driven rally in Bitcoin and Ethereum towards the end of the year will set the stage for the return of an “alt season,” or a widespread surge in altcoin prices.
He aims to take advantage of the existing market landscape, expecting that the issuance of U.S. Treasury bills (T-bills) and the continuation of the Treasury’s buyback program will enhance liquidity in the financial markets. This could pave the way for a more robust crypto market beginning in September.
With the U.S. presidential election in November, Hayes expects increased market manipulation by Treasury Secretary Janet Yellen in October, aiming to boost the stock market. He intends to take profits from his more speculative trades during this period and shift his capital into more stable assets like staked Ethena USD (sUSDe).
Arthur Hayes’ Bullish Outlook on Digital Assets
Hayes remains bullish on digital assets, emphasizing the relationship between the U.S. Treasury Department and the Federal Reserve. He highlighted the significance of fiscal dominance, where the necessity to fund the government outweighs the central bank’s concerns about inflation.
As the debt-to-GDP ratio surpasses 100%, the Treasury gains more power, instructing the Federal Reserve to support government spending by expanding the money supply.
Hayes believes that Treasury Secretary Janet Yellen’s actions, aimed at boosting nominal GDP growth, will likely benefit risk assets, including cryptocurrencies like Bitcoin.
He noted that $301 billion of T-bills will be net issued between now and year-end, injecting liquidity into the financial markets and potentially setting the stage for a major bull market in cryptocurrencies.
