Arthur Hayes, the co-founder of BitMEX, has predicted a massive rally for Bitcoin (BTC), with the cryptocurrency expected to hit $1 million in value. Hayes says the rally will be fueled by changes in Federal Reserve’s monetary policy, particularly interest rate cuts.
Hayes believes that the rate cuts are inevitable, as U.S. Federal Reserve Chairman Jerome Powell will have to reduce rates to counter recessionary concerns. The move will inject more liquidity into the markets, and Bitcoin’s price has typically done well when more liquidity is available.
In addition to the interest rate cuts, Hayes points to the Bank Term Funding Program (BTFP), which the Fed announced this month to provide liquidity to struggling U.S. banks, as another injection of liquidity into the markets that will drive Bitcoin’s price higher.
Hayes has also predicted that the Fed will engage in yield curve control (YCC), a type of monetary policy in which the government buys bonds to cap long-term interest rates at a specific target. He believes that YCC will start with US Treasury Secretary Janet Yellen and that it will be the start of financial repression.
Hayes has a history of making bold predictions for Bitcoin. He made a similar prediction in reaction to recent changes in monetary policy in China, with the People’s Bank of China reducing the Reserve Ratio Requirement (RRR) by 0.25%. He believes China’s move is a sign that an infusion of capital is coming to the markets.
Bitcoin is currently trading at around $27,525, and a rally to $1 million would represent a more than 3,400% gain. While some analysts have expressed doubts about Hayes’ predictions, many investors are closely watching Bitcoin’s price movements and are eager to see if it will continue to surge in the coming months.