Arthur Hayes predicted in a recent market commentary that Bitcoin could plunge to $30,000 in 2024.
Hayes, a Bitcoin billionaire known for founding the BitMEX crypto derivatives exchange, published his forecast in a blog post on Wednesday. He warned that Bitcoin could sink as low as $30,000 – $35,000 amidst a potential market downturn triggered by issues in traditional finance.
“I believe Bitcoin will dip before the BTFP renewal decision on March 12th. I didn’t expect it to happen so soon, but I think Bitcoin will find a local bottom between $30,000 and $35,000,” wrote Hayes.
The prediction comes as Bitcoin hovers under $40,000. Hayes blamed the Bitcoin slump on outflows from the Grayscale Bitcoin Trust and the looming expiration of a key Federal Reserve liquidity program.
Hayes argued the Fed would likely let its Bank Term Funding Program expire in March instead of renewing it. That could spark a “mini-financial crisis” and force the Fed to resume money printing to bail out struggling regional banks.
Bitcoin often rallies on expectations of looser Fed policy. But Hayes says the leading cryptocurrency is flashing warning signs that the Fed won’t ride to the rescue this time.
“Bitcoin is telling the world that the Fed is trapped between inflation and a banking crisis,” explained Hayes. “The market doesn’t appreciate this fact yet, but Bitcoin does.”
Once Bitcoin sinks below $35,000, Hayes says he’ll scoop up discounted coins ahead of an eventual Fed policy reversal.