Cryptocurrency prices suddenly dipped over the weekend just days following the much-hyped approval of spot Bitcoin (BTC) exchange traded funds (ETFs) by the US Securities and Exchange Commission (SEC). Bitcoin, the reference point of the crypto market’s health, surged to $49K on certain exchanges in the immediate aftermath of the historic announcement only to wash out all its momentum yesterday as it struggled to maintain $42K. A new blog post by former Bitmex CEO Arthur Hayes recently provided some sense as to where the market may be heading next.
Warnings of Arthur Hayes
Prior to the SEC’s nod, Hayes has been very critical of the bad side of spot Bitcoin ETFs in the long run. His primary concern lay in the aggressive accumulation of financial institutions like BlackRock of BTC to power up their spot ETFs. He pointed out that too much success of these new assets could “completely destroy Bitcoin.”
The investor predicted a major correction coming in March that would pull BTC prices down by 30% to 40% should the digital gold reclaim the $60K highs. He revealed that he will not buy the digital asset until that month’s decision dates have passed.
“I am preparing for a vicious washout of all the crypto tourists in March of this year,” Hayes wrote. He added that now until April will be a “no-trade zone” for him to mitigate risks.
Hayes also stated Bitcoin price could still dip between 20% to 30% because of a “dollar liquidity rug pull” even without it reaching its all-time high this quarter. But then again, the values could rebound once the Federal Reserve reprimes its money printers.
For the crypto personality, Bitcoin represents a neutral hard currency out of control of the banking system.
How is Bitcoin Holding Up?
As of this writing at 6:30 AM UTC on Sunday, Bitcoin’s price has shown very little movement as it went between a $42,517 low and a $43,234 high on the 24-hour charts. The digital asset now sits at $42,866, which is 0.4% below the previous day’s trading.
Transaction fell by 62%, too, as only $16.94 billion worth of BTC moved between wallet addresses within the timeframe. This puts its volume-to-market cap ratio at 2.13%.
Final Thoughts (Not a Financial Advice)
The take of Hayes in his latest post should help balance out the over-optimism of the market in the wake of the spot Bitcoin ETF approvals. However, there is no telling how other narratives could play out in the days to come as we gradually proceed closer to the halving and how other crucial events could shape future hype.
As always, balance things out with your due diligence because these forward-looking statements are not indicative of the overall health of the market and they don’t reflect whatever updates may be brewing in the near future.