Arthur Hayes, the co-founder of BitMEX, has offered a bold prediction for the future of Bitcoin, asserting that the Federal Reserve’s potential return to money printing could send the leading cryptocurrency on a soaring trajectory. 

Hayes’ insights delve into the intricacies of the bond market, highlighting a disconcerting trend that he believes may force the Fed’s hand in bolstering the US economy.

He points to a specific phenomenon known as the “bear steepener” as a red flag in the bond market. This term describes a situation in which long-term bond interest rates increase at a faster pace than short-term rates. Historically, the bear steepener has often served as a bearish signal for both stocks and other risk assets. 

The faster this bear steepener rises, the faster someone goes belly up, the faster everyone recognises there is no way out other than money printing to save govt bond markets, the faster we get back to the crypto bull market :). The Lord is my Shepherd, I shall not want.

— Arthur Hayes (@CryptoHayes) October 4, 2023

Hayes observes that as this bear steepener accelerates, the likelihood of economic distress and insolvency looms larger. This, in his view, will eventually leave policymakers with no recourse but to resort to money printing to salvage government bond markets. And it’s this very scenario that Hayes believes will reignite the crypto bull market.

In addition to his prognosis for the Fed’s monetary policy, Hayes paints a remarkably bullish picture for Bitcoin’s future price trajectory. He anticipates that by 2026, Bitcoin could reach a staggering value ranging between $750,000 to $1 million. This projection stands out in stark contrast to many conservative forecasts currently circulating in the crypto space.

What fuels Hayes’ optimism about Bitcoin’s potential meteoric rise? He cites a confluence of critical factors that, in his estimation, could propel the cryptocurrency to these unprecedented heights. Firstly, he foresees the possibility of a looming financial crisis that could drive interest rates down to zero. 

Alternatively, he envisions a scenario where rates might rise, but not at a pace that matches the voracious appetite of governments’ spending. In either case, the stage would be set for Bitcoin to shine as a safe haven asset.

Even before the grandiose projections for 2026, Hayes predicts that by the end of 2024, Bitcoin could command a price of around $70,000. This forecast is rooted in the anticipation of the next crypto halving event, a phenomenon that historically has had a significant impact on Bitcoin’s price. If this prediction holds true, it would signify substantial growth from Bitcoin’s current market price.

Hayes’ insights into the interplay between the Federal Reserve’s potential monetary policy shifts, bond market dynamics, and Bitcoin’s future value offer a unique perspective on the cryptocurrency’s trajectory. While these predictions are undeniably bold, they underscore the intricate relationship between macroeconomic factors and the digital asset market. 

The current price of Bitcoin on CoinGecko stands at $27,699, with a 24-hour gain of 1.1% and a seven-day increase of 4.8%.

Featured image from iStock

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