Arthur Hayes warns about the upcoming period for cryptocurrencies around the Bitcoin halving

Arthur Hayes Warns of a Challenging Period for Cryptocurrencies Around the Bitcoin Halving

Arthur Hayes, the founder of the renowned cryptocurrency exchange BitMEX and former CEO, has expressed concerns about the future prospects of risky asset markets, such as cryptocurrencies. His forecasts suggest a tough period leading up to May, with the possibility of price decreases instead of the expected increases due to the upcoming Bitcoin halving.

Bitcoin Halving – a Key Event in the Cryptocurrency Market

Another reduction in the reward for mining Bitcoin, commonly known as halving, is an unprecedented event. For the fourth time since Bitcoin’s launch in 2009, the market will witness a decrease in the flow of new BTC, which could have a significant impact on the price of this most popular cryptocurrency.

Constraints of U.S. Dollar Liquidity and Future Price Directions

Arthur Hayes highlights potential delays in the anticipated price increases of cryptocurrencies post-halving. He points out factors such as U.S. tax payments, the Federal Reserve’s quantitative tightening program (QT), and the Treasury General Account (TGA) balance, which could cause volatility in the market and make price trend forecasting challenging.

Concern Over Selling Cryptocurrency Assets Before the Halving

Anticipating a potential sell-off of most cryptocurrency assets associated with the upcoming Bitcoin halving, Arthur Hayes has decided to withdraw from the market until the situation stabilizes. He sold certain assets, such as Solana (SOL), MEW, and NMT, reinvesting the profits in Ethereum’s USDe protocol, which generates profits from Ethereum and derivative hedging.

Comparison of Profitability Between USDe and TerraUSD

The USDe protocol currently enjoys a profitability of 37.1%, attracting investors’ attention. However, one must not forget the case of TerraUSD, which experienced a sharp drop and a capital loss of $11 billion in 2022. This serves as a reminder of the risks associated with the dynamic cryptocurrency market.

Avoiding Short-term Trading and Returning to Bullish Trends

Arthur Hayes’ decision involves consistently avoiding short-term investments until May, with the intention of returning to the market in a more optimistic period. His strategy is based on cash and trend observation, aiming to effectively capitalize on potential investment opportunities.