One co-founder of Crypto derivatives exchange BitMEX has issued a dire warning for Bitcoin, Ethereum and other cryptoassets.
According to Hayes, the Federal Reserve and other major central banks are working to implement policies to curb rampant inflation in the developed world. However, he expects that these policies will likely have the effect of curbing the bullish run for stocks, which could bleed into the crypto market.
Hayes said that Bitcoin and Ethereum are closely correlated to movements in the largest stock exchanges, putting them at risk for a potential price crash in the coming months. Hayes predicted that global growth would decline with higher commodity prices, in addition to continued uncertainty over the war between Russia and Ukraine, resulting in a price drop for stocks and cryptoassets.
The BitMEX co-founder deflected the notion that tech companies would continue to push the world towards an exponential age and utopia, such as the argument put forth by Real Vision’s Roaul Pal. Hayes claimed that current forecasting was being made in the context of low interest rates, giving the future a more rosy glow.
I have no issue with that, but when money is cheap (or nearly free), investors like to act like we are on the cusp of an amazing techno utopia that is actually many years away (see: the Metaverse). This act of forecasting the bright future for a cheap price, due to low interest rates, allows investors to justify paying insane revenue multiples for various tech companies.
Hayes, going by what he called a “gut feeling” rather than hard numbers, predicted that Bitcoin’s price would crash to $30,000 by the end of the second quarter of the year, while Ethereum’s price would fall below $2,500. He also claimed that the majority of altcoins would suffer in the “coming crypto carnage,” which he said was frustrating for his portfolio balancing.
The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, or other advice. Investing in or trading cryptoassets comes with a risk of financial loss.