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"I think Bitcoin will find a local bottom between $30,000 and $35,000," declared Arthur Hayes, a renowned crypto trader and founder of 100X Group. In a published essay titled essay, "Yellen or Talkin'?"—referencing U.S. Treasury Secretary Janet Yellen—he explains how several geopolitical factors may impact the future of crypto.
Hayes appears to be short-term bearish, long-term bullish—so brace yourselves.
He slammed the financial strategies of US Treasury Secretary Janet Yellen and Federal Reserve Chairperson Jerome Powell, highlighting their impact on the market with his typical colorful commentary.
"U.S. Treasury Secretary Bad Gurl Janet Yellen and her simp cuck towel boy U.S. Federal Reserve Chairperson Jerome Powell oscillate between decisive action and vague talking points," Hayes wrote.
One of Hayes' key predictions is about Bitcoin's price trajectory, and for day traders and Bitcoin bros, things don’t look too good. His predicted $30,000 to $35,000 bottom is based on current market dynamics and impending decisions from key financial authorities. Hayes argues that the market has misinterpreted the actions and speeches of Yellen and Powell, leading to unwarranted optimism.
Hayes said traders failed to differentiate their prepared speeches from their true actions, which helped spike prices up, and now markets are correcting as they cool down and there is more room to understand the true impact of US monetary policy.
As a true crypto Degen, however, Hayes said once Bitcoin touches bottom, he will buy a bunch of altcoins.
“I will start bottom fishing. I will load up on Solana and $WIF,” he wrote. He’s also interested in Bonk—which he described as “the last cycle’s doggy money”—so there will be some of that in his portfolio, too.
Bitcoin and geopolitics
Hayes further links Bitcoin's performance to broader financial trends. He observes a divergence between Bitcoin and traditional financial indicators, for example, and suggests that Bitcoin is a more accurate harbinger of financial reality.
"Bitcoin is telling the world that the Fed is trapped between inflation and a banking crisis," he explains, indicating a cautious approach to the cryptocurrency's immediate future. Once again, he emphasized the difference between talking and doing: “The Fed’s solution is to attempt to talk the market into believing the banks are sound without providing the requisite money to make that fantasy a reality.”
For Hayes, inflation will play a key role in the price trend of Bitcoin as a hedge to store value. He believes that current geopolitical events may heat inflation up again, impacting the markets.
“Powell is undoubtedly aware of these issues, he will do everything he can to talk a big game about rate cuts without having to actually cut them,” he said, referring to the need to print money to afford all the wars U.S. is waging. “What might be a mild increase in the rate of inflation due to increased shipping costs could be supercharged by rate cuts and the resumption of [quantitative easing]."
“The market doesn’t appreciate this fact yet, but Bitcoin does,” he noted.
All these events may lead to a situation he believes could force the Federal Reserve's hand.
"The cessation of the BTFP will cause a mini-financial crisis and force the Fed to stop talkin’ and start Yellen with a rate cut," Hayes predicts.
Launched in March 2023 by the Federal Reserve, the Bank Term Funding Program (BTFP) aims to bolster the financial system's stability by offering eligible depository institutions one-year secured loans. This extra liquidity helps ensure these institutions can meet their depositors' needs, ultimately supporting American businesses and households by preventing potential financial crises and economic slowdowns. But the BTFP is slated to expire in March.
Another point of view
Stefan Rust, CEO of the economic data aggregator Truflation, has a more positive take on Bitcoin's current situation.
"Bitcoin has dropped below the psychologically important $40,000 barrier, and everyone is talking about how the ETF launch has been a flop, but nothing at all has really changed for bitcoin," Rust notes in a statement shared with Decrypt. In the long run, Rust said he remains bullish, predicting significant growth for Bitcoin."Bitcoin’s value is and always has been driven by scarcity, and the halving will only reinforce this narrative,” he argued. “We could see bitcoin hitting the $150,000 mark before the year is out or shortly after."
As with most OGs in the Bitcoin scene, Hayes is unsure about what politicians are doing to make the world better. And he said he believes Bitcoin gets more appealing, as nations get weaker. Some states and sectors may be showing positive signs, but he’s not bullish on fiat.
“The rest of America is broke as fuck, and drowning in debt,” he concluded.
Edited by Ryan Ozawa.