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Arthur Hayes Issued a Forecast for Bitcoin’s Short-Term Price Movement
According to the entrepreneur, the decline in Bitcoin’s price is not related to any fundamental issues with the cryptocurrency but rather to reduced liquidity — capital inflows into crypto funds and companies holding bitcoin reserves have weakened noticeably.
Hedge funds continue to profit from trades involving spot bitcoin ETFs; however, shrinking premiums and yields are forcing them to close positions, and some asset managers have reduced their bitcoin purchases due to lower income, the BitMEX co-founder complained.
The primary factor affecting the crypto market remains the situation in the largest market — the United States. The Treasury is in no hurry to inject liquidity, and the Federal Reserve has shown no willingness to return to easing interest rates. Against this backdrop, Bitcoin may face a “compression period,” Hayes said.
However, if the US and China introduce new economic stimulus measures and the amount of money in the market increases significantly, Bitcoin will show a stable bullish trend, the businessman hopes. He also suggested that the privacy-preserving cryptocurrency Zcash could demonstrate outperformance in the long term — amid evolving regulatory landscapes.
