Arthur Hayes, a renowned thought leader in the crypto industry, has warned Bitcoin investors to prepare for a potential 40% dip in March due to macroeconomic factors. In a recent blog post, Hayes highlighted three key reasons why March will be a pivotal month for Bitcoin.
The Bank Term Funding Program (BTFP), established after the 2023 banking crisis, is one of these reasons. This program, which allows banks to borrow funds from the Fed for up to a year using agency debt and US treasuries as collateral, is set to end on March 12. Banks that have been relying on this program will need to find new funding sources.
Another significant event in March is the Federal Reserve’s meeting on the 20th, where it is expected to cut rates for the first time since 2021. Hayes also anticipates a significant decline in the Reverse Repo Program (RRP) balance to around $200 billion. RRPs involve the sale of securities by financial institutions under an agreement to repurchase them at a higher price at a future date.
These events are expected to significantly impact Bitcoin’s price. The BTFP’s conclusion could jeopardize several US banks that have been surviving on this program. If Treasury Secretary Janet Yellen does not renew the program, some banks may face receivership. This could force Yellen to renew the program, but without enough printed money to cover bond losses from major banks like JPMorgan, Citi, and Bank of America, the US financial market could collapse, causing all asset types, including crypto, to plummet.
The RRP will also affect Bitcoin, as tradable assets always suffer without another source of dollar liquidity. If the BTFP forces some banks to their knees, the Fed may be compelled to cut rates, which would be a blow to Bitcoin and other assets. However, Hayes believes that holding BTC will be the best way out, as Bitcoin is the only neutral reserve hard currency that is not a liability of the banking system and is traded globally. He predicts that Bitcoin will rise sharply before and into the Fed’s eventual capitulation to restarting the money printer.
At the time of writing, BTC is trading at $44,137 and has been range-bound for the past day. In the past week, it has gained less than 4% to trade at a 52-week high above $45,000.
Note: Readers should conduct their own research before taking any actions related to cryptocurrencies. The author is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | North America |
| Countries | 🇺🇸 |
| Sentiment | negative |
| Relevance Score | 1 |
| People | Arthur Hayes, Janet Yellen |
| Companies | US Fed, Citi, Bank of America, BitMEX, JPMorgan |
| Currencies | Bitcoin, US Dollar |
| Securities | None |
