Bitmex co-founder and cryptocurrency investor Arthur Hayes has addressed the current state of the market with the effect the U.S. Federal Reserve’s upcoming tapering process may have. Hayes also links this with the Evergrande situation in China and advises cryptocurrency newcomers to hold on until new signals emerge next year.
Arthur Hayes Analyzes the Current Market Situation
Former Bitmex CEO and cryptocurrency investor Arthur Hayes issued his opinion on what cryptocurrency investors should do in the context of the current market. In his latest digest, titled “Circo Loco” (Crazy Circus), Hayes expounds on the current market situation in view of the larger economic framework, taking the Federal Reserve tapering and the recent Evergrande default event into account.
To him, the situation in China, combined with the accelerated tapering process that the Federal Reserve is already conducting, will affect cryptocurrency prices in a substantial way. Hayes states:
The Fed will continue tightening monetary conditions up until the point where stonks decline … or some part of the US Treasury market stops functioning normally.
Hayes stresses that a bear market in stocks might affect the tapering process and prompt the Federal Reserve to continue with its QE (quantitative easing) and printing policy.
What Hayes Thinks Investors Should Do
Based on this analysis, Hayes issues recommendations for cryptocurrency investors to get the most out of their capital during these times. In his vision, it will be very difficult to see bitcoin at $69K or ethereum at $5K during this period, as he predicts a sideways market with constant rises and falls.
This echoes predictions from the latest Huobi report, titled “Taper Landed,” which explains that the restriction in market liquidity will potentially affect markets’ performance in a negative way. The advice that Hayes gives is for new money to sit on the sidelines and wait for a better opportunity to enter the crypto market, which could appear after a March 2022 or June 2022 Fed rate hike.
For those eager to enter — or that already have market positions — the advice is to focus on play-to-earn, metaverse, or NFT-related tokens, as the overall performance of these is not directly related to the economy, and depends on other factors such as the introduction of these technologies into new markets that could support their growth.
What do you think about Arthur Hayes’ description of the crypto market and his recommendations? Tell us in the comments section below.