BitMEX founder Arthur Hayes released a lengthy article titled “Signposts” on Friday, analyzing the current market trends. Hayes pointed out that the depletion of the U.S. reverse repurchase operations (RRP) and the cancellation and restart of the buy-the-f***ing-panic (BTFP) financing program imply market liquidity instability. Given the sensitivity of the cryptocurrency market to liquidity changes, such fluctuations may impact the cryptocurrency market, especially Bitcoin. On the other hand, if the highly anticipated Bitcoin spot ETF begins trading, it could lead to a sharp increase in Bitcoin prices in the short term, but subsequently, excessive overvaluation may cause a price decline.
Overall, Hayes expects Bitcoin prices to experience a 20% to 30% decline in early March. Once the spot ETF starts trading as expected, it could drive Bitcoin to break through $60,000 and approach the 2021 historical high of $70,000. With rapid liquidity outflows, a larger decline of 30% to 40% may occur at that time. Hayes revealed that he has been purchasing a large amount of cryptocurrencies since the second half of last year, with the majority in Bitcoin and Ether, accounting for about 70% of his investment portfolio. However, he plans to start purchasing put options expiring on June 28th as a hedge in late February. After the temporary market turbulence subsides, he will reallocate by the end of March, anticipating that cryptocurrencies may continue to rise amid speculation about the upcoming Bitcoin block reward halving.
Another interesting point is that when commenting on the market situation in China, Hayes does not rule out the possibility of a pro-China candidate winning the Taiwan presidential election in 2024, which he believes could change the relationship between Taiwan and mainland China, impacting regional politics and economics.