Arthur Hayes: Changes in U.S. monetary policy will bring a large amount of dollar liquidity and reduce downward pressure on the crypto market

Odaily News In his latest blog post, Arthur Hayes, co-founder of BitMEX, analyzed in detail the potential impact of recent changes in U.S. monetary policy on the crypto market. Hayes pointed out that the Fed's decision to reduce the pace of balance sheet reduction from $95 billion per month to $60 billion is essentially equivalent to an additional $35 billion in liquidity per month. At the same time, given the current fiscal forecast, the Treasury Department is expected to issue additional short-term Treasury bills with maturities of 4, 6 and 8 weeks in the coming days to ensure sufficient liquidity to meet cash demand for the week around the end of May. This move is expected to bring additional dollar liquidity to the market. In addition, after the bankruptcy of Republic First Bank, a small U.S. bank, the FDIC used the insurance fund to ensure the interests of all depositors in order to avoid a run on deposits. This means that the U.S. authorities have essentially added $6.7 trillion in contingent liabilities to the banking system throughout the country, which will be funded by additional printing of money. Hayes believes that the above factors will continue to inject dollar liquidity into the market and reduce downward pressure on cryptocurrencies. Although the market may not react to this immediately, it is expected that prices will bottom out, fall and begin to slowly rise. He predicted that Bitcoin may have bottomed out around $58,600, and will return to above $60,000, and then consolidate in the $60,000-70,000 range before August. Hayes also said that he would take advantage of this rebound to unstake USDe and buy high-Beta altcoins at the bottom.