Bitcoin (BTC) investors are now closely monitoring macroeconomic indicators. The U.S. Federal Reserve, together with escalating Middle Eastern geopolitical conflicts have now become the main focus of attention.
Arthur Hayes believes that central banks need to resume money printing before BTC will experience its next major price increase.
During a podcast interview, Hayes shared his views about market entry, showing his preference for waiting instead of entering the market immediately. Although BTC has maintained its strength throughout the past few months, he considers the current situation to present great danger.
BTC currently trades at $69,926. The current price still remains far from the $126,000 all-time high that occurred in October. The crypto market continues to demonstrate extreme sensitivity towards all forms of global uncertainty.
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Why Bitcoin May Depend on Federal Reserve Policy
Hayes believes that upcoming BTC price increases will depend on the decisions made through monetary policy. He believes that wars do not cause higher cryptocurrency market values. The actual driving force behind the market increase occurs through increased monetary supply, which typically follows important global conflicts.
He explained that United States military operations will require additional government funding if Iranian and American tensions continue to rise. The Federal Reserve will face pressure to implement more flexible monetary policies because of the increased expenditure.
Risky assets experience significant price increases when central banks provide additional funds to the financial system. BTC has historically gained value during times when central banks implement extensive monetary policy.
Hayes will start his purchasing process at the moment when the Federal Reserve indicates it will begin to implement lower interest rates. He wants to remain inactive until that moment arrives.
Bitcoin Faces Short-Term Risks but Long-Term Optimism
Hayes maintained his belief in BTC’s future value, yet he warned that the cryptocurrency might decrease its worth within the upcoming months. A prolonged geopolitical crisis might trigger panic across financial markets.
A significant drop in equities would lead to a similar pattern for Bitcoin. Hayes predicted that the price would descend below $60,000 when liquidations started to affect all leveraged positions throughout the market.
He maintains his highly positive perspective about future market developments. Hayes has repeatedly predicted that Bitcoin could reach $250,000 within the next major cycle.
Other analysts are even more optimistic in the short run. Some analysts observe strong momentum in technology stocks, especially those of the Nasdaq index, which indicates that investors still display a strong willingness to take risks.
Hayes maintains that one fact remains unchangeable: BTC will probably end its current period of trading below $100000 soon.
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