Arthur Hayes, co-founder and former CEO of crypto derivatives exchange BitMEX, has reiterated that he believes the price of flagship cryptocurrency Bitcoin ($BTC) will surge to $1 million.
In a thread shared with his more than 370,000 followers on the microblogging platform Twitter, Hayes claimed that the collapse of First Republic Bank would not be the last in the financial sector.
Hayes believes another regional bank will soon face liquidity problems as the Federal Reserve prepares to hike interest rates again and is skeptical about the central bank’s proposed 25 basis point rate hike. In his words, the Federal Reserve either doesn’t “get it” or does, and “just hopes and prays the market is stupid.” In any case, he believes a rate hike “almost” guarantees that another bank not too big to fail will fail.
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It looks like the Fed is still looking to hike 0.25% at its meeting this week. They still don’t get it, or maybe they do and just hope and pray that the market is stupid. It doesn’t matter, a rate hike this week would almost cause another non-TBTF to bite the dust. pic.twitter.com/2nZy900hJd
— Arthur Hayes (@CryptoHayes) April 30, 2023
He also noted that First Republic Bank’s loan portfolio, which he says was filled with “jumbo mortgages” granted to wealthy individuals at low interest rates, fell in value after interest rates rose. Hayes suspects that the next bank that may fail will have a loan book heavily burdened with illiquid, sizeable commercial real estate loans.
The BitMEX co-founder also noted that the looming crisis in the banking sector could trigger a macroeconomic upheaval that could kickstart Bitcoin’s meteoric rise to $1 million. Hayes has been consistent in his Bitcoin predictions of $1 million.
Hayes also outlined a strategy to capitalize on the situation, saying he will “search my sell-side research for a chart showing the US banks with the largest CRE portfolios. I will then take a close look at 50%-75% OTM (out of the money) short term puts on these banks to be bought after Fed meetings.”
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I’ll search my sell-side research for a chart showing the US banks with the largest CRE portfolios. I will then take a close look at 50%-75% short term OTM puts on these banks to be bought after Fed meetings.
Yachsee!!
BTC = $1mm
— Arthur Hayes (@CryptoHayes) April 30, 2023
As CryptoGlobe reported, Hayes warned earlier this year that he believes a massive crypto price correction is imminent, but noted that there could be an ongoing bull run after that, which he’s “super bullish” about.
The BitMEX co-founder said that the Federal Reserve’s response to the banking crisis could push investors towards flagship cryptocurrency Bitcoin and into the cryptocurrency space. The former BitMEX CEO believes Bitcoin’s weightless and invisible nature compared to other savings vehicles like gold and real estate could make it an attractive option for investors looking to protect their wealth.
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