BitMEX founder Arthur Hayes released a lengthy article titled “Signposts” on Friday, analyzing current market trends.
Hayes pointed out that the exhaustion of the United States’ reverse repurchase agreement (RRP) and the cancellation and restart of the buy-to-finance plan (BTFP) suggest market liquidity instability. As the cryptocurrency market is highly sensitive to liquidity changes, these fluctuations may affect the cryptocurrency market, especially Bitcoin. On the other hand, if the highly anticipated Bitcoin spot ETF begins trading, it could lead to a sharp increase in Bitcoin prices in the short term, but subsequently result in a price decline due to overvaluation.
Overall, Hayes expects a 20% to 30% decline in Bitcoin prices in early March. Once the spot ETF begins trading as expected, it could push Bitcoin to surpass $60,000 and approach its 2021 historical high of $70,000. In the event of rapidly declining liquidity, a larger decline of 30% to 40% may occur.
Hayes revealed that he has been purchasing a large amount of cryptocurrencies since the second half of last year, with Bitcoin and Ethereum accounting for approximately 70% of his investment portfolio. However, he plans to hedge by purchasing put options expiring on June 28 starting in late February. After the brief market turbulence subsides, he will reallocate by the end of March, anticipating that cryptocurrencies may continue to rise amid speculation about the upcoming Bitcoin block reward halving.
Another interesting aspect is that when commenting on the market conditions in China, Hayes does not rule out the possibility of a pro-China candidate winning the 2024 Taiwanese presidential election, which he believes could change the relationship between Taiwan and mainland China and have an impact on regional politics and the economy.
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