LIVE🔥CryptoHayes Predicts Bitcoin's Price May Dip During Reward Halving!👇
Bitcoin has surged more than 65% this year, reaching new highs above $70,000 well before the halving. So, it could be volatile in the days before & after the mining-reward halving scheduled for April 20, which is usually seen as a positive event, says Arthur Hayes (co-founder & former CEO of BitMEX and CIO at Maelstrom).
In his latest blog post "Heatwave," Hayes pointed out that while many believe the halving will drive prices up, there's a chance it could actually lead to a price drop, which in the world of crypto is considered a correction of at least 10%.
The positive outlook for the halving is based on historical data showing that bitcoin often sees significant price increases in the months following the event.
"The idea that the halving will boost crypto prices is widely accepted," Hayes wrote. "But in markets, when everyone expects one outcome, the opposite often happens. That's why I think we might see bitcoin and crypto prices drop around the time of the halving."
Hayes mentioned that US tax payments due on April 15, combined with the Federal Reserve's policies to reduce the money supply (quantitative tightening or QT), could take dollars out of the market, prompting investors to sell off cryptocurrencies around the halving.
"With the halving happening at a time when there's less dollar liquidity than usual, it could add fuel to the fire of a crypto sell-off," Hayes said. "That's why I'm choosing to hold off on trading until May."
Hayes predicts that Treasury Secretary Janet Yellen will spend down the Treasury General Account after May 1, which could boost risky assets in the months leading up to the US presidential election in November.
"After May 1st, the pace of QT slows down, and Yellen starts spending to pump up asset prices. If you're considering a short position, April could be the right time to act. After May 1st, it's business as usual with asset inflation fueled by the Fed and U.S. Treasury," Hayes concluded.
