Despite the world’s turmoil, BitMEX CEO Arthur Hayes still dedicates time to study the market. While listening to finance gurus, he writes down important thoughts to share.
One biggest insight is that negative interest rates could destroy the banking system. The negative interest rate was close to improbable in the last few years. However, the situation is now totally different, and it’s a good sign for the gold industry. Arthur points on the stats: ‘every time rates in the U.S. go negative, gold miners increase profits, even if the price of gold isn’t soaring’.
Normally, gold is slow-moving in terms of price movement. And it’s hard to jump on board directly. But when we articulate people hoarding cash in banks or ‘in the mattress’, they may want to relocate part of their capital in other forms of money.
These can be precious metals, cryptocurrencies, or art pieces. Such a hedging method is well known in refugee families. If previous generations had to flee from military conflicts, local cash becomes less valuable for members of such families.
Arthur claims that the recent double top featuring 62% price retracement of the S&P 500 index is speaking for itself. Per Hayes, a low of 2,200 points is possible during the next Fall.
The average top-level hedge fund manager has to deal with a ton of risks these days. It looks like the majority of old school traders still consider cryptocurrencies as ‘risky assets’.
At the inception of the COVID-19 breakout, cryptocurrencies were slumping even harder than the traditional market. Citing legendary trader, Paul Tudor Jones, Hayes claims that Bitcoin could remove the career risk for fund managers, and could perhaps see a few other legends catch the Bitcoin bug.
“The exceptional investor invests in heretical themes, and sells once those themes become orthodox.
The average investor invests in orthodox themes, and sells once those themes become irrelevant.”
In some cases, big firms are ready to take Bitcoin chances and make money on possible benefits.