- The founder of BitMEX has predicted dark days for Bitcoin in the coming months.
- The grim prediction extends to other cryptocurrencies with the implosion expected to occur over the summer.
- The exec thinks that the increasing correlation between cryptocurrencies and the wider stock markets is to be blamed.
Bitcoin and the cryptocurrency markets have endured a tumultuous first quarter but things could turn a lot worse, according to the co-founder of BitMEX. He sees the price of Bitcoin falling all the way to $30,000 and pulling other cryptocurrencies in its descent.
The Q-Trap
Arthur Hayes, former CEO of BitMEX wrote a compelling piece on the mid-term future of cryptocurrencies on Medium. Titled the Q-Trap, Hayes predicts a huge crash for Bitcoin and other cryptocurrencies. He claims that Bitcoin could fall all the way to $30,000 in June which could be reminiscent of the lows of 2021.
He believes that Bitcoin and other cryptocurrencies are mirroring the movement of the stock markets with the correlations being at a record high. Hayes cites the global stance of regulators around the world toward Big Tech as part of the reasons for his predictions.
“The inconvenient truth that haunts crypto at this current juncture is that crypto moves in lockstep with the debt-based, unfree risk asset markets like global developed market equities,” Hayes wrote. “Justified or not, the market lumps crypto and big tech in the same cesspool.”
His “gut feeling” led him to opine that “Bitcoin and Ether will bottom well before the Fed acts and U-turns its policy from tight to loose.” He cast aspersions on the belief that the worst was over for the cryptocurrency market but notes that believers of this school of thought are overlooking the increasing correlation.
The actions of the Federal Reserve in increasing interest rates have adversely affected the Nasdaq 100 Index and the wider cryptocurrency markets. Amid fears of interest rates ascending, Hayes’ predictions have become a source of concern for investors.
The Price Outlook
Bitcoin has been trading around the $40k mark since the middle of March but recent macroeconomic factors triggered a massive sell-off that saw the asset lose over 10% in 24 hours. On the weekly charts, Bitcoin shed as much as 14% to trade below $40,000.
The decline in prices seeped into other assets with ETH, SOL, ADA, and LUNA recording losses in less than a day. The massive sell-off on Monday left the global crypto market cap at $1.86 trillion as investors grappled with the chaos that ensued.
The highs from the Bitcoin Conference in Miami and news of Terra stacking Bitcoin were not enough to stave off a dip in prices. Bitcoin famously reached its all-time high of $68,789 in November and at current prices, it’s down by 41.61%.
