Arthur Hayes, the founder of BitMEX, has issued a bold prediction about Bitcoin’s (BTC) future. He believes the cryptocurrency may dip towards $50,000 in the coming weeks but will rebound strongly by late September. This outlook is shaped by a key economic factor, the rising reverse repurchase agreement (RRP), which is linked to the Federal Reserve’s imminent interest rate decisions.
The RRP is essentially a financial maneuver where securities are sold with the agreement to repurchase them at a higher price later. When the RRP index rises, it often signals tighter liquidity in the market, which has historically pressured Bitcoin’s price downward. Hayes suggests that if the Federal Reserve does not cut interest rates before its September 18 meeting, BTC could continue its downward trend.
Hayes also warns that as BTC drops, altcoins may suffer even more. These assets typically exhibit greater volatility and tend to underperform during market downturns. Hayes anticipates that this will lead to an altcoin “capitulation,” where prices fall sharply.
Bitcoin Bears Long-term Fruits
Despite his short-term bearish outlook, Hayes remains optimistic about the long-term potential of both Bitcoin and select altcoins. He plans to buy altcoins at lower prices during the expected dip, focusing on what he calls “solid shitcoins” with real value. While Hayes has not disclosed his current picks, he has previously shown interest in tokens like Etherna and Pendle.
Looking ahead, Hayes predicts a strong rebound for Bitcoin by late September. He ties this to an expected Federal Reserve rate cut, which he believes will inject liquidity back into the market and drive up the prices of risk assets like Bitcoin. Hayes estimates that the Fed will reduce the interest rate to a range between 5% and 5.25%, sparking renewed interest in cryptocurrencies.
If his prediction holds, Hayes believes Bitcoin could not only recover but also set the stage for a more significant bull run. He envisions Bitcoin reclaiming $70,000 and Ethereum soaring to $4,000, potentially igniting a broader altcoin rally.