When Will $70,000 Be Reclaimed?

Arthur Hayes Says Bitcoin Has Reached the Bottom: When Will $70,000 Be Made Back?

BitMEX CEO Arthur Hayes has a long history in the cryptocurrency industry. Hayes graduated from the University of Pennsylvania’s Wharton School of Business. He started working as an equity derivatives investor in 2008. He founded BitMEX, the leading cryptocurrency derivatives platform, in 2014.

Hayes shared a post on the BitMEX blog to discuss the current state of Bitcoin and where he sees the price going in the future. He focuses specifically on the Federal Reserve and Republic First Bank.

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The Federal Open Market Committee (FOMC) recently announced that it will reduce the rate of quantitative tightening (QT) from $95 billion to $60 million per month. This means they will sell fewer financial instruments on the open market each month. In this way, they can reduce interest rates and provide some revival to the economy.

Hayes stated that in previous months, the FOMC fell below the $95 billion QT quota, so there was a potential to exceed the $60 billion quota. According to Hayes, this is positive for US Dollar liquidity and therefore Bitcoin.

Another positive potential for Bitcoin is the collapse of First Republic Bank. Fulton Bank purchased it in late April 2024, and the FDIC approved it as the “least-cost solution for DIF.” Essentially, the purchase was the outcome that allowed the FDIC to spend the least amount of money on deposit insurance.

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But as Hayes points out, the FDIC was covering more deposits than required by law. The FDIC only insures deposits up to $250,000. But with the First Republic, the FDIC gave Fulton Bank the cash necessary to fully insure all escrow accounts. According to Hayes, allowing any deposits to remain uninsured “is politically unacceptable in an election year, especially when the powers that be have consistently reassured the public that the banking system is sound.” Therefore, this move actually sets a precedent for full insurance of deposits.

If more banks fail, this precedent will inevitably lead to more money being printed because the FDIC will have to borrow from the Fed to cover all deposits. To some, this may be seen as recklessness that adds more value to Bitcoin’s consistent and predictable supply.

The story continues

To conclude the post, Hayes summarizes his stance in three points:

Bitcoin dropped to $58,600.

Bitcoin will hover between $60,000 and $70,000 by August

Fed and FDIC secretly printing money, giving Bitcoin more currency

So, with some evidence from macro policies and recent events in banking, Hayes believes Bitcoin could rise in the coming months as the effects of recent moves begin to be realized.

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