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Arthur Hayes Forecasts 30% Short-Term Decline in Bitcoin Price

2 mins
Updated by Kyle Baird
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In Brief

  • Arthur Hayes suggests that the decline in Bitcoin's price, just after the launch of the Bitcoin ETF may serve as a cautionary sign.
  • Hayes highlights the correlation between Bitcoin's peak and the 2-year US treasury's local low at 4.14%.
  • Hayes challenges the belief attributing Bitcoin's price slump to Grayscale Bitcoin Trust (GBTC) outflows.
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Prominent crypto trader Arthur Hayes looks at the falling price of Bitcoin (BTC) following the launch of the Bitcoin exchange-traded fund (ETF) only two weeks ago as a “cautionary sign.”

He highlights the correlation between Bitcoin reaching its recent peak and the two-year US treasury hitting a local low of 4.14% this month, which is currently showing a gradual increase.

Arthur Hayes Short-Term Prediction of Bitcoin Price

In a recent blog post, Hayes refutes the common argument that the reason for Bitcoin’s recent price slump is due to the outflows of the Grayscale Bitcoin Trust (GBTC).

“That argument is bogus because when you net the outflows from GBTC against the inflows into the newly listed spot Bitcoin ETFs, the result is, as of January 22nd, a net inflow of $820 million.”

Meanwhile, BeInCrypto recently reported that since the approval of spot Bitcoin ETFs, Grayscale has seen more than $3.3 billion in outflows.

Yet, he highlights the Bank Term Funding Program (BTFP) potentially not getting renewed as an explanation for this investor sentiment.

The US government established the BFTP as an initiative to guarantee that banks maintain sufficient liquidity to fulfill the needs of businesses and households. This is particularly important in case of a substantial volume of withdrawals within a short timeframe.

Read more: Bitcoin Price Prediction 2024/2025/2030

The BTFP renewal decision is set for March 12. Hayes expects Bitcoin’s price to keep decreasing until the decision is disclosed.

“A 30% correction from the ETF approval high of $48,000 is $33,600. Therefore, I believe Bitcoin forms support between $30,0000 to $35,000. That is why I purchased 29 March 2024 $35,000 strike puts.”

However, he foresees a reversal in the trend after the expected decision, anticipating a rise in Bitcoin’s price post-announcement.

“As the SPX and NDX dump due to a mini financial crisis in March, Bitcoin will rise as it will front-run the eventual conversion of rate cuts and money printing talk on behalf of the Fed into the action of pressing that Brrrr button.”

At the time of publication, Bitcoin’s price is $41,921.

Bitcoin Price Chart 1 Month. Source: BeInCrypto
Bitcoin Price Chart 1 Month. Source: BeInCrypto

Arthur Hayes Long-Term Outlook

Hayes confidently provides specific and optimistic projections when discussing Bitcoin.

In July 2023, BeInCrypto reported that Hayes predicts the decreasing interest rate, crypto halving event, and the launch of spot Bitcoin ETFs would push Bitcoin to $70,000 by the end of 2024. Hayes said:

“That’s when the real fun starts. That’s when the real bull market starts.”

Yet, Hayes’ optimism extends further to 2026. In two years’ time, he envisions the Bitcoin price reaching a range from $750,000 to $1 million.

Read more: What Is A Bitcoin ETF?

He is not the only one to throw out six-figure price predictions in recent times.

Analytics firm Messari predicted that Bitcoin would reach $600,000 by the end of the year. Meanwhile, VanEck predicts $275,000, and ETC Group forecasts $100,000.

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Ciaran Lyons
Ciaran is a cryptocurrency journalist based in Sydney, Australia. He particularly enjoys writing about CBDC developments and the practical implementations of cryptocurrency in real-world scenarios. He has also appeared across major television networks in Australia including Channel Ten, Channel Nine and SBS TV. Prior to his foray into cryptocurrency, Ciaran worked as a presenter on national radio station Triple J.