Arthur Hayes, co-founder of BitMEX, believes that a reduction in interest rates by the US Fed Reserve will rally Bitcoin’s ascent to $70,000.
On Tuesday, Arthur Hayes, co-founder of BitMEX, stated that the U.S. Federal Reserve’s decision to reduce interest rates will cause Bitcoin to rapidly rally to $70,000.
Hayes deemed Bitcoin to rise towards $70,000 after March, but the Fed hiked interest rates three times from March to the present. Fed Chair Jerome Powell stated that the next decision would be based on inflation and employment data.
Can Bitcoin Reach $70,000 If the Fed Lowers Interest Rates?
Macroeconomic analysts are attempting to predict when the U.S. Fed will stop raising interest rates or pivot since the central bank continued to hike rates after the bank collapse in March. In the meantime, the Fed’s balance sheet has shrunk in response to the debt ceiling crisis.
As the labor market has weakened and the unemployment rate has increased over the past month, the Federal Reserve is likely done with rate increases. Traders also await this week’s CPI and PPI data to corroborate the market’s direction.
Arthur Hayes stated that Bitcoin failed to reach $70,000 after March because people focused more on nominal Fed rates and did not compare them to high nominal GDP growth in the United States. The Fed’s only option was to reduce interest rates, restore the health of the U.S. banking system, and observe Bitcoin’s rapid ascent to $70,000.
During his keynote address at the Korea Blockchain Week conference, Hayes was asked whether Bitcoin can continue to rise if the Federal Reserve raises interest rates. Bitcoin has a positive correlation with Fed policy and other macroeconomic variables. Accurate rates (U.S. 2-Year Treasury Yields minus nominal GDP growth) are becoming positive, suggesting a Bitcoin rally is imminent.
The current BTC price is $26123, a 2% increase over the past 24 hours. The price began to rise due to traders’ purchases, with trading volume increasing by 100 percent in the past 24 hours.
