Bitcoin, Ethereum, and other crypto assets have received a grave warning from one of the co-founders of BitMEX, a crypto derivatives market. In a recent blog article, Arthur Hayes, Co-Founder and former CEO of BitMEX, argued that crypto assets and traditional financial markets are on the verge of a huge price drop.
According to Hayes, the Federal Reserve and other major central banks are striving to put policies in place to combat the developed world’s chronic inflation. However, he believes that these rules will have the impact of halting the stock market’s euphoric run, which could spill over into the crypto market.
According to Hayes, Bitcoin and Ethereum are highly associated with stock market movements, placing them at risk of a price crash in the coming months. Hayes projected that increasing commodity prices, combined with ongoing uncertainty about the Russia-Ukraine conflict, would slow global growth, leading to a dip in stock and crypto asset values.
The BitMEX co-founder refuted the argument advanced by Real Vision’s Roaul Pal that tech businesses will continue to propel the globe towards an exponential era and paradise. According to Hayes, contemporary forecasting is being done in an environment of low interest rates, which makes the future look brighter.
Arthur Hayes stated:
“That’s fine with me, but when money is cheap (or virtually free), investors prefer to act as if we’re on the verge of a fantastic technological nirvana that’s still a long way off (see: the Metaverse). Due to low interest rates, this act of anticipating the bright future for a low price allows investors to rationalise paying ridiculous revenue multiples for diverse tech businesses.”
Based on his “gut instinct” rather than hard statistics, Hayes anticipated that Bitcoin’s price would plummet to $30,000 by the end of the second quarter, while Ethereum’s price would go below $2,500. He also said that the “coming crypto carnage” would hurt the majority of altcoins, which he said was frustrating for his portfolio balancing.
Read more: Arthur Hayes, BitMEX co-founder, warns of a financial crisis
