Bitcoin (BTC) has been on a bull run for the past six months or so and the market is yet to respond — but it will in around six to 12 months, according to BitMEX co-founder and former CEO Arthur Hayes.
In a Sept. 5 keynote speech at Korea Blockchain Week, Hayes argued Bitcoin’s bull run began on March 10, the day Silicon Valley Bank (SVB) was taken over by the Federal Deposit Insurance Corporation.
Two days before SVB’s takeover on March 8, Silvergate Bank had gone into liquidation. Two days later on March 12, Signature Bank was forced to close by New York regulators.
In response, and in a bid to stop further possible collapses, the Federal Reserve created the Bank Term Funding Program (BTFP) — offering banking loans of up to a year in return for them posting “qualifying assets” as collateral.Hayes speaking at Korea Blockchain Week in Seoul. Source: Andrew Fenton/Cointelegraph
“Essentially, what [the Fed] did was backstop the entire banking system by saying: ‘Please give me your underwater dogshit bonds and I'll give you fresh dollars,’” Hayes said.“Me and the rest of the market rightly saw through this as basically them admitting that they caused this problem — the structure of the banking system — and this is one of the ways you can fix it which is: Print more money.”
He said since then, Bitcoin’s price has been up — currently around 26% — which is why he claims the bull market started that day.“We basically ditched this whole facade that we care about the value of the dollar and the value of any fiat currency.”
This pushed traders to consider fixed-supply assets such as Bitcoin, Hayes claimed.
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However, the rest of the market market hasn’t yet responded, but he gave a timeline of between six to 12 months for that to occur.
Hayes said even if the Fed and other central banks continued interest rate hikes to enable economic tightening or if they “print more money” then Bitcoin would still perform well.
“On both scenarios, whether the Fed raises or cuts, we are in a good position as the cryptocurrency industry,” he said.
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