Bitcoin Halving Predicted to Trigger Massive Crypto Sell-off by Arthur Hayes

BitMEX co-founder Arthur Hayes anticipates significant turbulence in the cryptocurrency market towards the latter half of April, driven by the upcoming Bitcoin halving event and strategic maneuvers by the US Federal Reserve.

Hayes foresees the convergence of April’s Bitcoin halving and strategic moves by the US Federal Reserve and Department of the Treasury to ignite a substantial sell-off of crypto assets, prolonging market downturns for weeks.

In a recent blog post, Hayes expressed his belief that while the Bitcoin halving could eventually boost prices, immediate pre- and post-halving periods might witness negative impacts, contrary to popular sentiment.

Hayes points out that the halving coincides with a period of tightened dollar liquidity, emphasizing the influence of US Federal Reserve and Treasury policies on market dynamics.

With the looming tax payment season in the US and tightening measures by the Federal Reserve, Hayes predicts a precarious environment for risky assets, including cryptocurrencies.

Following the Federal Reserve meeting on May 1, Hayes expects a reversal in tightening measures, accompanied by a release of significant liquidity by the Treasury, potentially injecting $1 trillion into the markets.

Considering the implications of the halving and government policies, Hayes has opted to refrain from trading until May, anticipating a more stable market environment.

Bitcoin (BTC) has surged by over 61% year-to-date, trading at $71,170 from around $42,200 at the beginning of the year, as per Cointelegraph Markets Pro.

Market sentiment, as measured by the Crypto Fear and Greed Index, has consistently remained in the “Greed” zone since January, reaching “Extreme Greed” with a score of 80 on April 9.

Hayes maintains that if his liquidity predictions materialize, he would feel more confident in pursuing investment opportunities, prioritizing risk management over potential gains.