Bitcoin (BTC), currently trading at $34,384, finds itself at a pivotal juncture. Arthur Hayes, the ex-CEO of cryptocurrency exchange BitMEX, has recently highlighted in his blog post that this could be the "trigger" moment keeping the prospects of a $1-million Bitcoin price tag alive.
A Warning Bell for Future Markets
In his blog post titled “The Periphery”, Hayes outlines that Bitcoin is already signaling potential market trajectories. He asserts that the recent economic and political developments are heralding significant changes.
"The structural hedging needs of banks and the borrowing needs of the US war machine reflexively feed on one another in the US Treasury market," he explained. Hayes underscores a crucial point: if long-term US Treasury bonds no longer provide the safety investors seek, they will inevitably gravitate towards other assets.
Hayes posits, “Gold, and most importantly, Bitcoin, will begin rising on true fears of global wartime inflation”.
Deciphering the Rise of BTC
The signs, according to Hayes, are evident. Bitcoin's price rose by a staggering 15% in the past week.
This surge closely followed U.S. President Joe Biden's address concerning the ongoing conflicts in Ukraine and Israel. The market's response was immediate: post Biden's speech, Bitcoin and gold witnessed an upswing, even as there was a sharp selloff in long-end US Treasuries.
However, Hayes emphasizes that this is more than just market speculation about possible ETF approvals. He states, “This isn’t speculation as to an ETF being approved — this is Bitcoin discounting a future, very inflationary global world war situation”.
Beyond the Horizon: Predicting Post-COVID Economic Scenarios
Arthur Hayes, celebrated for his foresight regarding post-COVID-19 global economics and the ensuing inflationary periods, suggests Bitcoin's potential to hit the million-dollar mark.
He cites yield curve control (YCC) as a precursor, a phenomenon that's already manifesting in places like Japan. In his concluding remarks, Hayes delivers a stark prediction. He believes the eventual outcome will see the Federal Reserve abandoning all pretenses of the US Treasury market being a free one.
In its place, it will metamorphose into what he terms a "Potemkin village", wherein the Fed dictates interest levels based on political expediencies. Hayes ends on a bullish note: "Once everyone realizes the game we are playing, the Bitcoin and crypto bull market will be in full swing.
This is the trigger, and it’s time to start rotating out of short-term US Treasury bills and into crypto”.