Arthur Hayes: Bitcoin Will Experience a 30% Correction

The price of Bitcoin is expected to undergo a 20-30% correction in the upcoming months due to a decrease in dollar liquidity.

Arthur Hayes, former CEO of BitMEX, has warned about this. In an article on the Substack platform, he outlined the potential risks for American banks and markets in early spring.

Hayes predicts that by March, the Fed’s reverse repurchase program balance will decrease to $200 billion, a historical average which he refers to as “zero.”

This program had a peak value of $2.5 trillion in late 2022. Another factor that could contribute to the correction is the end of the emergency bank financing program.

Banks that received support from this program will need to find funds to buy treasury bonds by March 12, according to Hayes. He believes that the Treasury Department will not extend this program in the year of the presidential elections, potentially leading to the bankruptcy of some banks.

With the combination of decreased liquidity and the possibility of another crisis, Hayes predicts that all financial markets, including cryptocurrency, will be impacted.

He anticipates a “healthy” correction of 20-30% for Bitcoin in early March, which could be even more severe if US-listed Bitcoin ETFs begin trading.