Hayes: Bitcoin's Bottom Is Approaching, But There’s a Catch

Hayes: Bitcoin's Bottom Is Approaching, But There’s a Catch

Arthur Hayes, the former CEO of BitMEX, suggests that Bitcoin may be nearing its bottom following a severe sell-off this week. However, he warns traders to exercise caution and wait for further declines in the stock market before making any purchases. Hayes links the recent downturn in cryptocurrency prices to reduced liquidity in the U.S. dollar, which he believes greatly influences Bitcoin's value.

Key Takeaways

Arthur Hayes believes Bitcoin might be close to bottoming out after a recent steep sell-off.
He advises against buying the dip too early, suggesting a need for a further stock market corrections.
The decline in the cryptocurrency market is attributed to reduced U.S. dollar liquidity.
Hayes predicts that a return to quantitative easing could result in Bitcoin possibly soaring to $200,000.
Tom Lee of Fundstrat anticipates Bitcoin could reach this target as soon as January 2026, despite current market conditions.

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Arthur Hayes, the former CEO of BitMEX, recently expressed his view that Bitcoin might be approaching its lowest point following a drastic sell-off that occurred earlier this week. He emphasizes that traders should not rush to buy the dip, as they should wait for a more significant decline in the stock market before making their moves.

In a blog post dated November 17, Hayes specifically pinned the recent drop in the cryptocurrency market on a decrease in U.S. dollar liquidity, which refers to the money circulating within the financial system. He believes Bitcoin's price is largely influenced by expectations regarding future liquidity levels in USD.

Earlier this year, Bitcoin achieved all-time highs driven by a combination of substantial ETF inflows, optimistic liquidity sentiment, and heavy purchases by treasury companies. However, the situation has shifted, with liquidity now tightening and Strategy's premium diminishing. Consequently, Michael Saylor's firm has lost its ability to raise capital effectively.

The decline in Bitcoin's price has occurred alongside decreasing chances of the Federal Reserve implementing another rate cut within this year. Nonetheless, Hayes remains optimistic that a considerable correction in the stock market could trigger a restart of liquidity injections akin to quantitative easing.

Should money printing resume, Hayes forecasts that Bitcoin could soar to reach an impressive $200,000. Fundstrat's Tom Lee has also expressed his belief that Bitcoin might achieve this price point as early as January 2026, despite the current intensity of the market sell-off.

Earlier today, Bitcoin briefly dipped below $81,000 on the Bitstamp exchange before recovering some of its losses.