Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not responsible for any financial losses incurred while trading cryptocurrencies. Do your own research by contacting financial experts before making any investment decisions. We believe all content to be accurate as of the date of publication, but some offers mentioned may no longer be available.
BitMEX co-founder Arthur Hayes anticipation The cryptocurrency market will reach its peak in March. After that, a major correction is expected.
Hayes noted that Bitcoin bottomed in 2022 around the same time the Fed's reverse repo facility (RRP) reached its peak. The liquidity infusion has significantly helped push technology stocks and Bitcoin.
He predicted that the Fed could end up losing its ability to manage rising bond yields in an effective manner if the Treasury General Account (TGA) runs out of money.
According to the analyst, money market funds are on track to withdraw $237 billion of liquidity from the reverse repo program (RRP) in the first quarter in order to buy short-term government debt. This liquidity injection would be a bullish development for Bitcoin in the short term.
Related to
The Treasury Department will have to spend TGA if Congress fails to raise the debt ceiling.
These two developments are likely to positively impact Bitcoin price movement in the first quarter of the new year.
However, the Treasury will have to renew the TGA once Congress raises the debt ceiling. "At that point, Treasury would be free to borrow on a net basis again and would have to backfill the TGA. This would be negative dollar liquidity," he said.
Tax deadlines will be another bearish headwind for Bitcoin in April.
Hence, Hayes believes that the cryptocurrency market will witness a sharp correction due to the above-mentioned factors that negatively impact liquidity.
The former BitMEX CEO also opined that other factors should be taken into consideration. These include the monetary policies of China and Japan.
Disclaimer: The opinions expressed by our writers are their own and do not represent the views of U.Today. The financial and market information provided on U.Today is intended for informational purposes only. U.Today is not responsible for any financial losses incurred while trading cryptocurrencies. Do your own research by contacting financial experts before making any investment decisions. We believe all content to be accurate as of the date of publication, but some offers mentioned may no longer be available.
Source link