A potential increase in the deterioration of the U.S. dollar's value could potentially strengthen Bitcoin's position.
Alright, let's dive into the intriguing world of cryptocurrencies and commodities, focusing primarily on Bitcoin and gold, as the US pumps the brakes on international trade. Some investors are pondering over how these economic policies might dance with markets beyond the scope of standard finance.
Enter Arthur Hayes, the savvy BitMEX co-founder and avid crypto commentator, who thinks the ripples could start a party for Bitcoin and bullion in unforeseen ways.
Hayes set the stage for his argument in a series of passionate posts on X, dishing out why trade policies could inadvertently fan the flames of Bitcoin's prices. His economics-fuelled thoughts revolve around tariffs and the dance between the almighty US dollar and global capital flows.
Got it? Great! So, when tariffs put American products up for grabs, American companies might find themselves in a hot pickle, competing against foreign companies. This struggle can leave foreign investors swallowing their US savings and spitting them back out into their home economies. According to Hayes, this cash-flow circus weakens the greenback.
In weakness, investors often turn to secure bets like Bitcoin or gold for cover. Boom! There you have it - Hayes sees both cryptocurrencies and precious metals as contenders for a chunk of that sweet, sweet cash flow if current policies stand pat.
Another factor Hayes flashes the spotlight on is the shrinking yields on US two-year Treasury bonds. Lower yields usually signal that markets expect interest rate cuts. If the Federal Reserve lower the rates or return to the old game of quantitative easing, it could bring a flood of fresh cash into the market - something that has put Bitcoin in the money in the past.
But remember, all good things come with a side of sour grapes. Any boost in price might just be a side-effect of broader monetary shenanigans rather than true value growth.
Hayes doesn't wear rose-tinted glasses, though. He's quick to point out that the crypto market is on edge, especially in the short-term. Bitcoin has seen its fair share of dramatic shifts lately, and Hayes warns that the coming days are going to be a rollercoaster. He recently tweeted, "Mrkt no likey 'Liberation Day.'"
He also marked $76,500 as a level to watch and said that if Bitcoin can manage to cruise at that price from now until tax day (April 15th in the US), the danger zone will be a distant memory.
In other words, Bitcoin had better hold its ground at that price level to fend off further selling pressure. If it does, Hayes thinks the larger upward trend will continue unscathed.
- Arthur Hayes, the BitMEX co-founder, believes that the increased tariffs could benefit the prices of Bitcoin and gold due to the potential weakening of the US dollar.
- As a result of the struggle between American companies and foreign competitors, foreign investors might repatriate their US savings, leading to a potential cash influx into other markets such as stocks, sports-betting, or technology.
- According to Hayes, any monetary easing measures like lower interest rates or quantitative easing by the Federal Reserve could bring a flood of fresh cash into the market, possibly boosting the price of Bitcoin.
- Despite the potential price increase, Hayes warns that the crypto market remains volatile and that investors should expect short-term market swings and dramatic shifts, as Bitcoin has recently experienced.
- Hayes predicts that if Bitcoin manages to maintain a price of $76,500 up until tax day (April 15th in the US), it can fend off further selling pressure and continue its upward trend.
