Long positions in Bitcoin, and later in altcoins, are advisable, according to former BitMEX CEO Arthur Hayes, who cited a shift in the macroeconomic landscape in his recommendation.
The expert highlighted the outcomes of the G7 finance ministers and central bank governors’ meeting. One topic discussed was the weakness of the Japanese yen against other reserve currencies.
To address this, they decided to reduce the yield gap between Japanese government bonds and those of its allies. This will be feasible with the easing of monetary policy by G7 countries, as Japan’s central bank has maintained near-zero rates since 2009. The regulator cannot afford a sharp tightening, given its ownership of over 50% of the country’s government debt.
This week, the ECB and the Bank of Canada lowered their key rates by 25 basis points. Hayes emphasized that this occurred despite inflation exceeding the 2% target.
“The problem lies with the weak yen. I believe that ‘bad girl‘ [U.S. Treasury Secretary Janet] Yellen has ended the Kabuki theater performance of rate hikes. It’s time to focus on preserving the global financial system under the leadership of Pax Americana,” the specialist concluded.
The expert urged attention to the final statement from G7 leaders. In his view, it might include a decision on coordinated actions in the currency or bond markets to strengthen the yen. Its absence would imply “tacit agreement” on the need for central banks, except Japan’s, to lower key rates.
The former BitMEX CEO considers the base scenario to be no easing from the Fed, given Joe Biden’s scoring points in the declared fight against inflation ahead of the November elections. However, Hayes did not rule out that the Bank of England might cut rates sooner than the market currently expects.
The expert acknowledged that the easing by the Bank of Canada and the ECB led him to revise expectations regarding the return of cryptocurrencies from the “summer doldrums to the Northern Hemisphere path.” The trend is clear, monetary regulators have initiated a cycle of easing, he added.
“We know how to play this game. It’s the same damn game we’ve been playing since 2009, when our Lord and Savior Satoshi [Nakamoto] gave us the weapon to defeat the devil TradFi,” Hayes wrote.
The specialist announced plans to shift liquidity from USDe to altcoins. He promised to disclose his positions in due course.
“Crypto bulls are awakening and are about to tear apart the hides of profligate central bankers,” he concluded.
Previously, Hayes predicted Bitcoin’s rise to $70,000 by the end of summer.
Standard Chartered recently reported that they expect the price of digital gold to rise to $100,000 before the U.S. elections.