Bitcoin bull market on $1.4T US liquidity spike — forecast
Bitcoin (BTC) could see a “re-acceleration” of the bull market thanks to the new economic changes in the United States.
That's the latest macro forecast by Arthur Hayes, former CEO of crypto exchange BitMEX.
Hayes on the crypto bull market: “Forget about the Fed”
Bitcoin and altcoins have little hope that the US Federal Reserve will soon cut interest rates to inject more liquidity into the economy.
As Cointelegraph reports, the odds of this event are steadily decreasing with each macro data publication.
But for Hayes, the Fed is no longer America's benchmark — instead, it's Treasury Secretary Janet Yellen.
On April 29, the U.S. Treasury will release its quarterly cash flow report, which describes how effectively the government manages cash flow.
There are two key sources of liquidity on the radar: the Treasury General Account (TGA) and so-called reverse repurchase agreements (RRPs).
“Expected tax receipts add $200bn to TGA,” Hayes wrote in an April 26 post.
“Forget about the May Fed meeting, the 2Q24 refund statement is out next week.”
Taking TGA, or money out of the pool of RRPs, allows money to flow into the economy – a key catalyst for risk-asset performance and crypto upside in particular.
Hayes argues that the focus is on Yellen as part of a theory that calls for US dollar printing to accelerate into the upcoming presidential election and beyond.
A $1 trillion TGA drain, $400 million in RRPs, or a combination of both is on the table, which could amount to a total of $1.4 trillion in liquidity injections.
Hayes concluded.
“Any of these three options will result in a panic rally and, more importantly, expect a re-acceleration of the crypto bull market.”
Bitcoin ETFs See “Overdue” Slowdown
Other players see Bitcoin's main input as a positive feedback loop for price.
RELATED: BTC Halves ‘Fire Sale That Is Fueling Crypto Assets' – Arthur Hayes
US spot Bitcoin exchange-traded funds (ETFs) remain far from their captive audience — despite the most successful ETF debut in history.
Commenting on BlackRock's iShares Bitcoin Trust (IBIT), the largest yield of assets under management excluding Greyscale Bitcoin Trust, Bloomberg ETAF analyst Eric Balchunas dismissed the recent slowdown as a concern.
“When the $IBIT daily income stream ends at 71 days, the record setting is not complete. “Always look at ETFs as assets after the first 72 days on the market,” he wrote, with data from Bloomberg.
“The IBIT, FBTC and other proprietary leagues were so heated, gasping for breath.”
He added, “Out of 10,698 funds (including ETFs, mutual funds, CEFs) in the US, $IBIT currently ranks 2nd in terms of YTD flows.
While overall allocations are still a bit off, Cathy Wood, CEO of ARK Invest, a leading bitcoin ETF provider, sees a pick-up pace.
This article does not contain investment advice or recommendations. Every investment and business activity involves risk, and readers should do their own research when making a decision.
