Billionaire Arthur Hayes Says Bitcoin Price Action Before and After Halving “Could be Negative”

Billionaire Arthur Hayes has expressed a cautious view regarding the upcoming Bitcoin halving and the effects it will have on the price of the asset. While many experts anticipate a significant rally for Bitcoin following the halving event, Hayes believes that the price action before and after the event could actually be negative. In a blog post published on April 8, Hayes pointed out that the prevailing narrative surrounding the halving is that it will have a positive impact on crypto prices. However, he cautioned that when the market consensus leans heavily towards a particular outcome, the opposite often occurs. Based on this observation, Hayes believes that Bitcoin and crypto prices, in general, may experience a slump around the time of the halving.

US Dollar Liquidity to Impact Crypto Markets

Another factor contributing to Hayes’ apprehension is the tightness of United States dollar liquidity around the estimated halving date. He believes that this scarcity of liquidity will fuel a sell-off of crypto assets. As a result, Hayes has decided to abstain from trading until May, referring to the period between April 15 (the tax payment deadline) and May 1, when the Federal Reserve is expected to discuss a potential reduction in its Quantitative Tightening program.Hayes explained that the anticipated reduction in the pace of QT is favorable for dollar liquidity as the decline in the Fed’s balance sheet slows. He sees May 1 as a turning point, marking the end of a precarious period for risky assets and a return of liquidity as Janet Yellen and the Fed take measures to boost asset prices.

Arthur Hayes predicts that Bitcoin prices will plummet before and after the halving, US dollar liquidity will be tighter than usual at that time, which will add impetus to the crazy selling of crypto assets. However, after May 1, the QT rhythm will slow down and return to the… pic.twitter.com/nOT6D4I7Y8

— Wu Blockchain (@WuBlockchain) April 9, 2024

While Hayes does not plan to short the market outright, he has closed profitable positions in various cryptocurrencies and intends to remain in a no-trade zone until May 1. 

“From now until May 1st, I will be in a no-trade zone. I hope to return in May with dry powder ready to deploy to position myself for the bull market to begin in earnest.”

Other Crypto Veterans Remain Optimistic

Despite billionaire Arthur Hayes’ cautions view, other industry executives, such as Ripple CEO Brad Garlinghouse, remain optimistic. Garlinghouse predicts that the total market value of cryptocurrencies will double this year, largely driven by spot ETFs and Bitcoin halving. He believes that the introduction of real institutional money through ETFs is a significant factor contributing to this positive outlook.“I’m very optimistic. I think the macro trends, the big picture things like the ETFs, they’re driving for the first time real institutional money,” he told CNBC on April 7.Likewise, Matteo Greco, research analyst at digital asset firm Fineqia International, expects Bitcoin to reach $75,000 by the halving event.“Historically, BTC halving events have marked significant points followed by 9-18 months of uptrend, culminating in cycle peaks,” he wrote in a recent note. On another positive note, investors poured a total of $646 million into crypto products, pushing the year-to-date inflows to an unprecedented $13.8 billion and surpassing the previous year’s total of $10.6 billion.