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Bitcoin Resilience Amid Chaos: Insights from BitMEX Founder

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In a recent article, BitMEX founder Arthur Hayes shared his perspectives on the current state of the cryptocurrency market, the potential impact of war and rising energy prices on Bitcoin, and the Federal Reserve’s actions. Hayes is a well-known figure in the crypto space, and his insights carry weight among industry enthusiasts.

Bitcoin’s Strength Amid Global Turmoil

Hayes believes that despite initial concerns of a Bitcoin sell-off triggered by global conflicts and surging energy costs, Bitcoin is likely to outperform traditional assets like bonds during times of war. In his view, even if there is an initial period of weakness, it’s an opportunity to “buy the dip.” He points out that since the Ukraine/Russia conflict began, the long-term US Treasury bond ETF (TLT) has fallen by 12%, while Bitcoin has surged by 52%.

However, Hayes highlights a potential consequence of the Federal Reserve’s actions. If the Fed decides to cut interest rates, it could lead to a significant weakening of the US dollar. This, in turn, could exert upward pressure on oil prices, as oil is priced in dollars. Hayes cautions against this move, especially when geopolitical tensions are high, as it could have dire political repercussions, potentially leading to gas prices soaring close to $200 per barrel by the next year’s election.

Hayes also takes a jab at those who downplay inflation by joking that “if you exclude all the things people need to live and earn a living, inflation is non-existent.” He expresses confidence in the robust US economy, which he believes will drown out concerns about rising inflation.

In Hayes’ assessment, he doesn’t foresee a recession in 2024, citing the basic components of GDP growth. He explains that government net spending, powered by running a deficit, contributes to GDP growth. This government spending has a multiplier effect, leading to private-sector activity, job creation, and economic growth.

Given the current economic dynamics, Hayes predicts that the median voter will be satisfied with a strong stock market, a robust economy, and controlled inflation.

Regarding the Federal Reserve’s actions and the impact on the financial system, Hayes cautions against overloading on long-term bonds with a buy-and-hold strategy. He advises against holding illiquid long-term debt, especially if the liquidity situation changes. Instead, he suggests considering short-term debt with leverage as a better option for those limited to traditional financial assets.

Crypto Outlook: Asset Hierarchy

Hayes also delves into the cryptocurrency world, where he sees opportunities for significant returns. He outlines a hierarchy of crypto assets, with Bitcoin and Ethereum at the top as the “reserve assets,” followed by other layer-one blockchains like Solana. Finally, he acknowledges the potential for substantial gains in decentralized applications (dApps) and their respective tokens.

Arthur Hayes offers a comprehensive analysis of the current financial landscape, emphasizing the potential of cryptocurrency in a world marked by economic uncertainty and geopolitical tensions. His insights reflect his belief in the resilience of Bitcoin and other crypto assets during turbulent times, making them appealing investment options.

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Catalysts For The Crypto Bull Run: Macro Influences & Bitcoin Halving

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In a recent interview, prominent macro investor and Real Vision CEO Raoul Pal made a bold prediction, suggesting that the next crypto bull market will likely kick off in the second quarter of 2024. Pal’s forecast centers around the upcoming Bitcoin halving event, but he emphasizes that macroeconomic factors will be the primary drivers of this anticipated uptrend.

Pal notes that the Bitcoin halving cycle tends to coincide with specific macroeconomic conditions, primarily characterized by monetary expansion and low-interest rates. According to him, these macro factors have dominated previous halving events, creating a conducive environment for cryptocurrency price surges. While Pal acknowledges that the halving narrative might be overstated, he underscores that it continues to drive market sentiment effectively.

One of the key catalysts Pal points to for the crypto market 2024 is the likelihood of central banks further reducing interest rates and potential fiscal stimulus measures, particularly in the lead-up to the United States presidential election. However, Pal refrains from making specific price predictions, citing the scrutiny that often accompanies such forecasts.

Arthur Hayes’ Crypto Bull Market Prediction

On the flip side of this prediction, Arthur Hayes, the former CEO of BitMEX, has offered an alternative perspective. In a recent tweet, Hayes drew attention to the surging U.S. Treasury yields as a potential precursor to a new bull market for Bitcoin and cryptocurrencies. He highlighted the concept of a “bear steepener,” which signifies a scenario where long-term interest rates rise more rapidly than short-term rates.

Hayes argues that the current steep rise in the 2s30s curve (the difference between 30-year and two-year yields), combined with increasing long- and short-term interest rates, is exerting significant pressure on the overall economy. He contends that banks, due to their portfolios’ leverage and non-linear risks, are likely to sell bonds or pay fixed rates as interest rates continue to rise. This selling pressure, in turn, could lead to further declines in bond prices.

Hayes suggests that these economic dynamics will inevitably result from a return to massive liquidity injections, countering the quantitative tightening observed since late 2021 and potentially reigniting the crypto bull market.

However, Hayes cautions that such a transition may not be without casualties along the way. As U.S. government bond yields hit 5% this week for the first time since August 2007, the global financial landscape appears to be at a critical juncture, with significant implications for the cryptocurrency market.

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BitMEX Ventures Into Prediction Markets: Traders Bet On Real-World Outcomes

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BitMEX, a prominent cryptocurrency derivatives exchange, has ventured into the world of prediction markets, introducing a novel feature that allows traders to place bets on real-world events. This new offering, aptly named “Prediction Markets,” presents BitMEX users with an intriguing opportunity to engage in speculative trading across various topics and industries, potentially capitalizing on their predictions.

Initial BitMEX Prediction Market Contracts

As of September 13, BitMEX has unveiled three initial prediction market contracts. The first, denoted as “P_FTXZ26,” enables traders to forecast the recovery rate of customer claims in the event of FTX’s bankruptcy. This contract expires on December 25, 2026, at 20:00 UTC. 

Meanwhile, the “P_XBTETFV23” contract allows participants to wager on whether the U.S. Securities and Exchange Commission (SEC) will approve a Bitcoin Exchange-Traded Fund (ETF) before October 17, 2023, with an expiry date of October 27, 2023, at 20:00 UTC. 

Lastly, the “P_SBFJAILZ26” contract permits users to speculate on the possibility of Sam Bankman-Fried, the founder of FTX, receiving a jail sentence. This contract is scheduled to conclude on December 25, 2026, at 20:00 UTC.

These prediction markets on BitMEX come with some distinctive features compared to traditional futures contracts. Notably, contracts are priced using the “Last Price” method, leverage is not offered, margin and settlement are conducted in Tether (USDT), and payouts are based on a bounded price range from 0 to 100. 

Additionally, maker fees are set at 0.00%, while taker fees are 0.25%. Early settlement is possible if the outcome or event is resolved before the contract’s predetermined expiry.

BitMEX has stated that certain jurisdictions may not have access to this product suite. To provide an illustration of how BitMEX Predictions function, consider a fictional scenario where a trader enters the market by predicting the recovery rate for FTX’s customer claims using the “P_FTXZ26” contract. 

They anticipate it will be $0.60 per $1 and proceed to purchase 1,000 contracts at a price of 20. They hold onto these contracts until the contract’s expiry date.

In this fictional case, the contract’s settlement price reaches 30 at expiry, which is 50% higher than their entry price. Consequently, the trader’s payout is $100 USDT, calculated as (Exit Price – Entry Price) * Multiplier * Number of contracts.

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Bitcoin Navigating $25k Amidst Financial Shifts: Insights From Arthur Hayes

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In a recent blog post, BitMEX founder Arthur Hayes shared his insights on the current state of the financial markets and its implications for Bitcoin. While some analysts anticipate a drop below $20,000 for Bitcoin, Hayes suggests a different scenario. 

Federal Reserve’s Struggle & Bitcoin’s Strength

According to his vision, Bitcoin is projecte­d to remain around $25,000 during the initial months of Q3. Hayes asse­rts that the Federal Re­serve’s struggle to maintain control over the US Treasury market may lead to a resurgence of rate­ cuts and quantitative easing (QE). This situation will likely favor the growth of Bitcoin.

Hayes points out that despite the Fed injecting liquidity into the markets, not all assets will experience an uptick. To illustrate this, he analyzes the performance of various indices and BTC since March 8, 2023, the day Silvergate filed for bankruptcy. 

According to Hayes, regional banks face a grim situation, with the US Regional Bank Index down 24%. The retail depositors’ ability to earn nearly 6% from the Fed while banks struggle with 2% to 3% loan book yields has resulted in a crisis for these banks. This trend is reflected in the Russell 2000 Index, mainly comprised of smaller companies with minimal growth.

Hayes observes that the technology sector, particularly big tech and AI companies, stands apart from this struggle due to their self-sufficiency and AI-driven successes. This trend is evident in the 24% surge of the Nasdaq 100 Index. 

However, Hayes emphasizes that Bitcoin’s allure lies in its potential to counter a corrupt fiat banking system. As traditional banks falter, Bitcoin’s value proposition gains strength. Additionally, BTC’s value benefits from increased fiat liquidity.

The ongoing crackdown on crypto in the US and the West aims to control operators outside traditional finance. Hayes questions the dichotomy between the approval process for Bitcoin ETFs, highlighting the apparent ease of approval for traditional asset managers. 

He suggests that the sudden interest of traditional banks and asset managers in crypto is due to competition disappearing. These entities aim to become gatekeepers for cryptocurrencies in exchange for fiat investments.

Hayes concludes by discussing the dilemma of maintaining Bitcoin’s ethos in a financial landscape flooded with fiat-controlled products. In this volatile environment, Hayes plans to embrace crypto’s weaknesses and strategically invest. 

He acknowledges that the market’s ability to weather the storm will depend on the interest income seeking new opportunities. He anticipates a bullish return for cryptocurrencies and expresses excitement for the potential of certain “shitcoins” when the bull market revives.

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BitMEX Introduces Floki Inu Perpetual Listings With Up To 50x Leverage 

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BitMEX, one of the world’s leading crypto derivatives exchanges, announced that it would be adding two Floki Inu perpetual listings to its platform, FLOKIUSD (Bitcoin-margined) and FLOKIUSDT (Tether-margined), with up to 50x leverage. 

According to the exchange’s blog post, Floki Inu is a cryptocurrency created by fans and members of the Shiba Inu community and named after Elon Musk’s Shiba Inu.

Starting at 12:00 UTC on May 10th, 2023, BitMEX traders will have the opportunity to take long or short positions on FLOKI through two new listings.

The FLOKIUSD offering is categorized as a quanto contract, which implies that it features a consistent Bitcoin multiplier. This unique attribute enables traders to speculate on the fluctuation of the FLOKI/USD exchange rate without the need to handle either FLOKI or USD directly. 

By depositing the margin in XBT, traders can realize gains or losses denominated in XBT as the FLOKI/USD rate oscillates.

On the other hand, FLOKIUSDT is a USDT-margined linear perpetual swap that enables traders to leverage trade the FLOKI token’s price without having to possess FLOKI, thereby gaining exposure to the token’s price movements.

Both FLOKIUSD and FLOKIUSDT come with specific contract specifications that traders need to keep in mind. For instance, the FLOKIUSD has a Bitcoin multiplier of 1 XBT, a max leverage of 50x, and a risk limit of 50 XBT, among other things.

Similarly, FLOKIUSDT has a margin currency of USDT, a max leverage of 33x, and a risk limit of 1,000,000 USDT, among other features, according to the blog post.

BitMEX encourages traders to check their blogs regularly and follow them on social media to be the first to know about new listings, product launches, and giveaways. 

However, with these two new FLOKI listings, BitMEX seeks to provide its traders with more opportunities to trade and leverage their positions while staying ahead of the competition.

Floki Inu (FLOKI) Price Analysis

Floki Inu is currently showing bearish signs, as per the latest data from CoinMarketcap. The cryptocurrency is trading at $0.00003462, down by about 2.83% in the last 24 hours. However, the weekly chart recorded an increase of about 4.28%. 

Source: CoinMarketcap

In addition, its trading volume has witnessed a decrease of 37.78%, reaching $40,046,602 in the last 24 hours, whereas the market capitalization has decreased by 2.86%. 

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Bitcoin Network Experiences Rare Chain Fork & Double-Spend Of Nearly 10 BTC

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On May 8th, 2023, ForkMonitor, a website that tracks and analyzes the Bitcoin network, reported a chain fork with a length of 2 that occurred at block height 788686. According to the site, 13 transactions involving nearly 10 BTC were double spent in the longest chain.

BitMEX, one of the world’s leading cryptocurrency derivatives exchanges, noted that chain splits of this nature on the Bitcoin network are quite rare. The last one may have occurred in November 2020. However, given the recent increase in stale blocks, the occurrence of a chain fork was not unexpected.

ForkMonitor reported that multiple blocks were produced at height 788686. The heaviest chain survives as new blocks are mined, and the other blocks become stale. Some explorers may forget the stale blocks. 

As per Bitcoin’s Block Timestamp Protection Rules, the timestamp reported in a block is not necessarily accurate. There can be a slight delay between when nodes first detect a block and when the system processes it.

If a transaction occurs in one branch and a conflicting transaction occurs in the other, it could indicate an RBF fee increase or a double-spend attempt. In this instance, 13 transactions involving 9.85805149 BTC were double-spent on the longest chain. 

Additionally, one transaction involving 0.00336058 BTC was fee bumped on the longest chain. The presence of an RBF flag was not considered, and for each output, ForkMonitor checked if less than 0.0001 BTC changed it.

Nevertheless, this occurrence of a chain fork on the Bitcoin network highlights the importance of monitoring the network’s stability and security. As the cryptocurrency market continues to grow, it is essential to remain vigilant to ensure the continued growth and success of the industry.

Bitcoin Chain Fork Sparks Discussions

The recent news of a chain fork on the Bitcoin network has led to discussions among the BTC community about transaction confirmations and network congestion.

Some community members expressed surprise at the fact that Bitcoin could be double-spent. One individual commented, “I didn’t know BTC could be double-spent. Interesting.” Others pointed to the Satoshi paper, which recommends waiting for six confirmations before considering a transaction final with high probability. 

Given that the double-spent transactions involved nearly 10 BTC, several community members suggested that the transactions should have waited for the recommended six confirmations.

In addition to discussing transaction confirmations, the BTC community also raised concerns about network congestion. One community member questioned whether BTC would be forked to reduce BRC-20 congestion. 

It remains to be seen how the Bitcoin network will address these concerns and improve its stability and security moving forward.

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Pepe (PEPE) In Its Way To $1B Market Cap, Shorts Suffer $11M Losses

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In a stunning turn of events, the meme-inspired cryptocurrency, Pepe, has witnessed an unprecedented surge in market cap, pushing it closer to the coveted $1 billion mark. 

Source: CoinGecko

CoinMarketcap’s data paints a staggering picture, with the token’s value skyrocketing by a whopping 7292.43% in just 18 days. As of today, May 5th, the token has hit its all-time high, reaching $0.000002322.

Although its current market cap stands at an impressive $886,428,893, data shows that it has experienced a 62.54% increase in the last 24 hours alone. At present, the coin’s value is trading at $0.000002119, marking a 62.44% daily increase and a 656.25% increase in the weekly chart.

Source: CoinMarketcap

To add to the frenzy, the trading volume has also experienced a substantial surge, with a staggering increase of $788,504,695 – a remarkable 215.85% surge, according to CoinMarketcap.

Short Positions On Pepe Result In $11 Million Losses

In the world of cryptocurrency trading, short positions can often lead to huge losses, and the latest victim seems to be Pepe (PEPE). 

Shorts against Pepe have taken a major hit over the past 24 hours, with CoinGlass data revealing losses of at least $11 million across several exchanges. 

The highest losses were incurred on the crypto exchange OKX, with traders losing $5.5 million alone. Huobi and Bybit were also impacted, with losses of $2.2 million and $3.6 million, respectively. Even BitMEX suffered losses of a few hundred thousand dollars.

These exchanges had only recently started offering Pepe futures trading in the past week. Interestingly, the coin’s losses only rank third to Bitcoin (BTC) and Ethereum (ETH) futures liquidations, usually resulting in the highest futures losses.

PEPE Emerges As Top-Searched Coin

Meanwhile, another report shows that the latest meme-inspired cryptocurrency has been causing a stir on the decentralized exchange Uniswap, emerging as one of the most searched coins on the data platform Nansen. 

In the past week, Uniswap’s v2 and v3 liquidity pools for PEPE-WETH have been the most active contracts, with more than 82,750 and 72,950 transactions, respectively, and accruing nearly $900,000 in fees.

Although its liquidity pool activity has increased, traders were hit hard last weekend due to a lack of liquidity, resulting in significant slippage when converting large amounts of PEPE for other currencies like ETH. 

Despite this setback, PEPE has surpassed the trading volume of the largest meme coins in the crypto ecosystem, DOGE and SHIB, and has been listed on several centralized exchanges like OKX, MEXC, and Huobi.

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BitMEX’s USDTUSDC Perpetual Swap, Offering Traders 10x Leverage On USD Coin

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BitMEX, the cryptocurrency derivatives exchange, has launched its latest product – the USDTUSDC perpetual swap. Traders will now be able to use Bitcoin (XBT) to pay margins and speculate on the price of USD Coin (USDC) via BitMEX’s new offering.

Starting from 04:00 UTC on March 12th, BitMEX will offer traders the opportunity to take long or short positions on USDC through their USDTUSDC perpetual swap. This latest addition to BitMEX’s offerings will allow traders to speculate on the stability of the USDC peg.

A significant advantage of trading USDC listings on BitMEX is the ability to leverage up to 10x and hold some of the industry’s highest maximum position sizes.

Additionally, its USDTUSDC product features a fixed Bitcoin multiplier, allowing traders to take positions on the USDT/USDC exchange rate without having to touch USDT or USDC.

Due to the quanto risk premium, its USDTUSDC perpetual swap may trade at a premium or discount to the USDT/USDC spot price. Traders can deposit Bitcoin (XBT) as a margin and realize gains or losses in XBT as the USDT/USDC rate fluctuates.

The contract specifications for the USDTUSDC perpetual swap include a Bitcoin multiplier of 0.0001 XBT (10,000 Satoshis), with the XBT contract value being the USDTUSDC price multiplied by the Bitcoin multiplier.

The underlying for the USDTUSDC perpetual swap is BUSDTUSDC, with a max leverage of 10x and a risk limit of 50 XBT.

The maker fee for the USDTUSDC perpetual swap is -0.01%, while the taker fee is 0.075%. The base initial margin is 10.00%, while the base maintenance margin is 5.00%.

However, the launch of BitMEX’s USDTUSDC perpetual swap provides traders with a unique opportunity to speculate on the price of USD Coin with Bitcoin and enjoy high leverage and position sizes.

BitMEX Founder Proposes New Stablecoin Mechanism – NUSD

As TronWeekly reported recently, BitMEX’s founder, Arthur Hayes, suggested a novel approach to address the difficulties of using Bitcoin as a financial asset and exchanging it with fiat currencies like USD. 

According to Hayes, the process is complicated since exchanges require a bank account for the USD component of a transaction.

To tackle this issue, Hayes proposed the use of a new stablecoin called NUSD. The stablecoin’s value would be equivalent to $1 worth of Bitcoin plus a short 1 Bitcoin/USD inverse perpetual swap. To create 1 NUSD, traders would need to deposit 1 BTC on a derivatives exchange and short 1 XBTUSD swap.

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Bitcoin-Backed NUSD: A New Stablecoin Proposal By BitMEX Founder

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Arthur Hayes, the founder of BitMEX, has proposed a new stablecoin mechanism in his Medium blog post. Hayes stated that using Bitcoin as a financial asset and easily swapping between it and a fiat currency like USD is not easy, as exchanges require a bank account for the USD leg of a transaction. 

Hence, he proposed a new stablecoin called NUSD, which would be worth $1 of Bitcoin + short 1 Bitcoin/USD inverse perpetual swap. To create 1 NUSD, traders need to deposit 1 BTC on a derivatives exchange and short 1 XBTUSD swap.

Hayes argued in a Medium blog post that traditional exchanges require users to have a bank account to trade between Bitcoin and fiat currency. It is a significant hurdle for crypto companies that aim to create a parallel financial system that does not rely on banks. 

Stablecoins like Tether (USDT) have emerged as an alternative to traditional exchanges, allowing traders to move between fiat and cryptocurrency without the need for a bank account.

NUSD: A New Stablecoin Proposal Leveraging Bitcoin’s Potential

The proposed NUSD stablecoin aims to bridge the gap between centralized and decentralized finance, allowing users to swap between Bitcoin and fiat currency without the need for a bank account. 

Hayes believes that stablecoins are not meant to serve as a decentralized store of value but rather to provide a fiat tokenization service that banks refuse to offer.

Hayes argues that overcollateralized stablecoins like MakerDAO/DAI and algorithmic stablecoins like TerraUSD are fundamentally unnecessary. Instead, stablecoins like NUSD are intended to solve a real pain point in the crypto capital markets, allowing traders to quickly move between fiat and crypto.

The problem with current stablecoins, according to Hayes, is not centralization but rather the lack of reputable, established banking institutions launching their own stablecoins. 

If commercial banks like JP Morgan were to launch their own stablecoins, they could put existing stablecoins like USDT, USDC, and BUSD out of business immediately.

While the proposed NUSD stablecoin is still in the conceptual stage, Hayes’ idea has garnered significant attention from the crypto community. 

If successfully implemented, NUSD could provide a more efficient way for traders to swap between Bitcoin and fiat currency without relying on traditional exchanges or banks.

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Binance Joins Other Crypto Firms In Aid For Turkish Earthquake Victims: Report

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A catastrophic 7.8 magnitude earthquake hit Turkey and Syria early on Monday, leaving behind a trail of destruction and debris. However, among others, the crypto sector has stepped up to offer them support, including Binance, the world’s leading crypto exchange.

The quake, one of the strongest to hit the region in a century, claimed over 4,300 lives and injured thousands more. As the affected communities and governments struggled to cope with the aftermath, the cryptocurrency community also offered support.

Multiple exchanges, including leading crypto exchange, Bitfinex, Bybit, and BitMEX, have pledged to offer aid packages to help those affected by the earthquake. Gate.io has stated that it has started preparing aid packages and will deliver them in coordination with the authorities.

Binance, Bitfinex & Others Supporting Victims

Binance CEO Changpeng Zhao took to Twitter to express his sadness and support for the victims, saying that the Binance team is working on a solution to help. 

In a tweet from Binance Turkey, the company expressed sympathy for the families of the deceased and hoped for a quick recovery for those who were injured.

According to Binance Turkey’s tweet translation:

May God have mercy on our citizens who lost their lives in the earthquake that took place in Kahramanmaraş and the surrounding provinces; Our condolences to their families and our nation, and we wish a speedy recovery to the injured.

Bitfinex has committed to developing an aid package for earthquake victims, and Bybit has announced that aid is being sent to the impacted area. 

Meanwhile, BitMEX has pledged to give the proceeds from its current trading competition to the Red Crescent and urged others who are able to make a donation to do so.

Turkey led the MENA region as the largest cryptocurrency market and recorded the highest year-over-year growth in crypto transactions among all regions in 2022. 

It was ranked 12th globally in terms of crypto adoption, with a 10.5% YoY growth in crypto transaction volume, according to Chainanalysis’s 2022 Global Crypto Adoption Index.

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