In a recent article, BitMEX founder Arthur Hayes discussed the monetary policies of the US Treasury and the Federal Reserve System and their impact on the market. The article also explored the correlation between the decline in Bitcoin prices and US fiscal policies.
According to Arthur Hayes, Bitcoin has dropped 30% from its peak of $48,000 at the time of ETF approval (currently $33,600). He believes that Bitcoin will find support between $30,000 and $35,000. Therefore, he has purchased put options with a strike price of $35,000 expiring on March 29, 2024, and simultaneously sold his positions in Solana and Bonk.
On the other hand, since the Bitcoin and cryptocurrency markets are among the few global markets that are not heavily regulated or manipulated, these markets may reflect changes in US dollar liquidity earlier than traditional financial markets. Arthur Hayes suggests that investors should pay more attention to the policies of the US Treasury Secretary Yellen.
Arthur Hayes states that Yellen will release a fiscal report on January 31, and it is highly likely that the Bank Term Funding Program (BTFP) will expire. If this program is not renewed, banks will have to repay massive loans, which may lead to reduced US dollar liquidity in the market. However, if market conditions change (e.g., BTFP extension) or Yellen reveals a significant reduction in funds in the Treasury General Account (TGA), this could bring additional US dollar liquidity to the market. At that time, Arthur Hayes will adjust his investment strategy, including closing put options and increasing investments in cryptocurrencies.
(This article is authorized and reprinted from GT Radar)
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