The price of bitcoin has climbed 30% since the start of the year, surging to over $23,000 per bitcoin after falling below $16,000 at the end of 2022. The price of ethereum has seen a similar rise while some of the top ten cryptocurrencies — BNB, XRP
Now, former CEO of bitcoin and crypto exchange BitMex Arthur Hayes has warned that a “disastrous global financial meltdown” could be about to bring down the price of bitcoin and the crypto market.
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“Bitcoin is simply experiencing a natural rebound from local lows under $16,000,” Hayes wrote in a blog postadding that he thinks “bitcoin is rallying because the market is leading a rally” in Federal Reserve money printing.
“Market anticipation of a pause in rate hikes and even a Fed pivot is building, despite repeated official Fed comments to the contrary,” wrote analyst Noelle Acheson. crypto market, in an email. Remark.
Fed Chairman Jerome Powell, who last year pushed interest rates to a 15-year high in a concerted effort to bring inflation down, said rates will have to rise in 2023, echoed by other Fed officials who endorsed the benchmark hike. federal funds rate above 5%.
“If the Fed doesn’t follow through on a pivot, or if multiple Fed governors denounce any expectation of a pivot even after a ‘good’ consumer price index (CPI) prints, bitcoin will come back likely to previous lows,” Hayes wrote, predicting this scenario would cause “risky asset prices to crater. on the USD dissolves”.
If this scenario of a “disastrous global financial collapse” occurs, Hayes expects him to “take another bite of the apple” and “know that the market has probably bottomed out, because the crash that is happening when the system temporarily breaks down will either hold the previous lows of $15,800 or it won’t.”
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The price of bitcoin fell below $16,000 following the shock of FTX’s collapse last year, which put pressure on the combined crypto market, which had already lost around $2 trillion. dollars.
However, despite the warning of an impending market collapse, Hayes expects the Fed to eventually step in to support the markets.
“It doesn’t matter what level is finally reached on the drawdown, because I know the Fed will then go to the printing press and avoid another financial meltdown, which in turn will mark the local bottom of all risky assets,” he said. added Hayes.