Arthur Hayes, co-founder and CIO of BitMEX, shared his insights on the macroeconomic situation and its potential impact on the crypto market. This took place during the TOKEN2049 conference in Singapore on Wednesday. In his speech, titled “Current Macroeconomic Events,” Hayes predicted a major market crash following the Fed’s policies.
However, he also believes that a new bull market will emerge shortly after. On Wednesday, the Federal Reserve (Fed) is expected to cut interest rates for the first time since the Covid-19 pandemic. This decision has global investors on edge, as they anticipate significant market shifts.
Hayes Criticizes the Fed’s Interest Rate Cut
Hayes expressed strong criticism of the Fed’s decision to cut interest rates. Especially concerning, he pointed out, is the current environment of high public spending and inflation that remains above target levels. He warned that this move could lead to a market collapse, saying, “The market will collapse a few days after interest rates are cut.”
Hayes attributed this potential crash to the narrowing interest rate gap between the US dollar and the Japanese yen. As a result, this could create significant volatility in the market.
Cryptocurrency Predictions: Ethereum Among the Potential Winners on Fed
In addition to critiquing the Fed, Hayes shared his predictions on how various cryptocurrencies will perform in the new interest rate environment. He emphasized that Ethereum (ETH), along with ENA, ETHFI, and PENDLE, could be standout performers. Hayes believes these cryptocurrencies can thrive as treasury yields fall, making them more attractive investments.
Notably, he revealed that he holds significant positions in these cryptocurrencies but has avoided investing in ONDO. Furthermore, Hayes mentioned that his Maelstrom portfolio is strategically positioned to benefit from a declining interest rate environment.
Ethereum vs. the US Dollar: Hayes’ Bullish Outlook
Hayes pushed back against claims that Ethereum has been underperforming, describing it as an “Internet bond” offering a 4% return. He predicted that Ethereum could outperform both the US dollar and treasury bonds in the near future.
He confidently stated, “Gains in Ethereum will exceed gains in the US dollar and treasury bonds.”
In conclusion, Hayes predicted that after the initial market decline due to the Fed’s interest rate cut, a new bull market will begin, with Ethereum and other key assets leading the way to profitability for investors.