Arthur Hayes predicts crypto market decline after Bitcoin halves.

The impending Bitcoin halving, along with the moves made by the Federal Reserve and the Treasury, will cause the cryptocurrency market to plummet for a few weeks, says BitMEX co-founder Arthur Hayes.   

While Hayes believes the Bitcoin halving would lead to price hikes in the medium run, he warned that the immediate impact could be detrimental in a recent blog post on April 8.  

Despite widespread belief to the contrary, Hayes emphasized that the halving event will really be good for cryptocurrency values. According to his argument, the converse usually happens when most market players expect one thing to happen.   

In addition, Hayes laid forth his thesis on how market forces are influenced by Federal Reserve and Treasury policies, and he pointed out that the halving happens at the same time as dollar liquidity is getting tighter.  

U.S. tax payments diminishing liquidity, the Federal Reserve commencing Quantitative Tightening, and the Treasury’s General Account remaining untapped are some of the variables that Hayes cited as making the second half of April a dangerous asset time  

Markets are expected to be supported after the Federal Reserve's meeting on May 1st, when Hayes predicts a slowdown in monetary policy tightening and the release of around $1 trillion in liquidity from the Treasury's General Account.  

As the halving approached, Hayes foresaw a decline in Bitcoin and cryptocurrency prices, but he also admitted that the market could go against his negative predictions and keep going up.   

Given his long positions in crypto assets, he also expressed his happiness at being wrong.  

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