Bitcoin (BTC) has been in an uptrend for about six months and the market hasn’t reacted yet — but according to BitMEX co-founder and former CEO Arthur Hayes, it will in about six to 12 months.
In a September 5 keynote speech at Korea Blockchain Week, Hayes argued that the Bitcoin bull market began on March 10, the day Silicon Valley Bank (SVB) was acquired by the Federal Deposit Insurance Corporation.
Two days before the SVB takeover on March 8, Silvergate Bank went into liquidation. Two days later, on March 12, Signature Bank was forced to close by New York regulators.
In response, and to prevent further possible collapses, the Federal Reserve created the Bank Term Funding Program (BTFP), which offers bank loans with terms of up to one year against the deposit of “qualifying assets” as collateral.
Hayes speaks at Korea Blockchain Week in Seoul. Source: Andrew Fenton/Cointelegraph
“Essentially what [the Fed] He did that by fending off the entire banking system by saying, “Give me your underwater bonds, please, and I’ll give you fresh dollars,” Hayes said.
“Me and the rest of the market rightly took that to mean that they basically admitted that they caused this problem – the structure of the banking system – and that’s one of the ways to fix it, which is: Print more money .”
He said Bitcoin’s price has since risen – currently up around 26% – which is why he believes the bull market started that day.
“We’ve basically given up the whole facade that we care about the value of the dollar and the value of any fiat currency.”
Hayes claimed this has prompted traders to consider fixed income assets like Bitcoin.
Related: Why is Jerome Powell making us nervous about the likelihood of a recession?
However, the rest of the market has yet to react, but gave a six to 12 month timeframe for it to happen.
Hayes said even if the Fed and other central banks continued raising rates to allow the economy to tighten, or if they “printed more money,” Bitcoin would still do well.
“In either scenario, whether the Fed hikes or cuts rates, we’re in a good position as a cryptocurrency industry,” he said.
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