BitMEX founder, Arthur Hayes, shared insights on X about Bitcoin’s potential rally amidst challenges faced by New York Community Bancorp ($NYCB) and the banking sector. Hayes highlighted the complex relationship between traditional finance and cryptocurrencies, signaling potential impacts on Bitcoin’s value.
Skepticism on Bank Fixes
In his recent tweet, Hayes predicted that Jerome Powell and Janet Yellen might resort to printing more money due to NYCB’s unexpected loss. NYCB’s stock value plummeted by 46% after its loan loss reserves surged tenfold beyond expectations.
Hayes expressed doubt about the effectiveness of previous solutions, stating, “Guess the banks aren’t fixed.” He also pointed out a significant drop in 10-year and 2-year yields, suggesting the market expects a renewed bank bailout to tackle the underlying issues.
Additionally, Hayes mentioned the upcoming end of the Federal Reserve’s Bank Term Funding Program (BTFP), introduced after the 2023 banking crisis to provide liquidity to banks by allowing them to use a broader range of collateral for borrowing.
He noted, “If my forecast is correct, the market will bankrupt a few banks within that period, forcing the Fed into cutting rates and announcing the resumption of the BTFP.”
According to him, this scenario could result in a liquidity injection that may buoy cryptocurrencies like Bitcoin.
Bitcoin’s Price Reaction
Hayes suggested that while Bitcoin might experience a temporary dip amid the banking concerns, the potential dumping of assets by NYCB and other banks could prompt a new bailout.
Hayes drew parallels to the cryptocurrency’s performance during the March 2023 banking crisis. He predicts a similar trajectory, suggesting a brief dip followed by a significant rally.
During the March crisis, Bitcoin’s value surged over 40%, attributed to its perceived role as digital gold or a safe-haven asset amid financial instability
Perhaps, this analysis by the BitMEX founder adds to the ongoing conversation about the interconnectedness of traditional finance and the cryptocurrency market, where Bitcoin is often considered a hedge against economic uncertainties.