Arthur Hayes, co-founder of cryptocurrency exchange BitMEX, announced that he predicts a significant fluctuation in BTC prices before and after the upcoming Bitcoin halving.
Arthur Hayes Predicts Tighter US Dollar Liquidity Before Halving
Additionally, Hayes states that there will be tighter liquidity in the US dollar during this period, which may increase the selling pressure on crypto assets.
However, it suggests that after May 1, the pace of quantitative tightening (QT) will decrease and US inflation will return to its typical rhythm.
Hayes' prediction sheds light on potential market dynamics as Bitcoin approaches its halving event, scheduled for April 20.
Hayes also made statements about his positions.
''Although I did not exit the market completely, I closed several shitcoin and memecoin trading positions at a profit.
I will not be trading from now until May 1st. “I hope to return in May ready to position myself for the bull market to begin in earnest,” he said.
The halving, which occurs approximately every four years, requires reducing the reward miners receive for verifying transactions, effectively halving the rate of new Bitcoin issuance.
Historically, halving events have been associated with increased volatility in Bitcoin prices as investors speculate on the impact of decreasing supply on market dynamics.
According to Hayes, the tightening of US dollar liquidity in the pre- and post-halving period could further increase market fluctuations.
As liquidity constraints emerge, investors may seek to liquidate their crypto assets, leading to intense selling pressure and potential price declines in the cryptocurrency market.
However, Hayes offers an optimistic perspective for the period after May 1, suggesting that the rhythm of quantitative tightening will slow down and become compatible with the regular pace of US inflation dynamics.
This transition could potentially stabilize market conditions and reduce the high volatility witnessed during the halving period.
*This is not investment advice.
