Bitcoin is unlikely to reach the $77,000 price point again soon, according to BitMEX co-founder Arthur Hayes. Following the Federal Reserve’s announcement on March 19 to slow down its quantitative tightening, Bitcoin dipped near that level for the first time since November. Hayes believes the end of aggressive asset selling by the Fed could ease money supply pressures, potentially benefiting riskier assets like Bitcoin. Other industry experts share similar views, suggesting that the Fed has room to provide more support to markets. Despite Bitcoin being down from its January peak, many maintain that this is just a normal correction in a broader upward trend. As Market sentiment improves, the Crypto Fear & Greed Index reflects a shift towards neutrality.
Bitcoin Faces Challenges in Reaching $77,000 Again
Recent comments from Arthur Hayes, co-founder of BitMEX, suggest that Bitcoin is not likely to hit the $77,000 mark anytime soon. This comes after the Federal Reserve’s announcement to slow down its quantitative tightening (QT) efforts.
Bitcoin recently dipped near the $77,000 level for the first time in months, according to CoinMarketCap data. Hayes stated that QT is “basically over,” which could offer some relief for risk assets like Bitcoin. The Fed’s decision to lower its monthly Treasury cap from $25 billion to $5 billion starting in April might ease liquidity pressures in the Market.
Hayes highlighted the importance of the Supplementary Leverage Ratio (SLR) exemption and a possible return to quantitative easing (QE) for a more robust Market recovery. An SLR exemption allows banks to exclude US Treasury securities from certain calculations, promoting more lending. In contrast, QE aims to increase money supply to stimulate economic growth.
Other industry experts echo Hayes’ sentiments. Jamie Coutts from Real Vision remarked that QT is “effectively dead,” noting that recent treasury volatility is calming, signaling a better liquidity environment. Axie Infinity co-founder Jeff “JiHo” Zirlin remarked that the Fed’s slowdown is beneficial not only for crypto but also for equity markets.
Despite Bitcoin falling nearly 22% from its record high of $109,000 in January, some analysts view this as a normal mid-cycle correction. Kain Warwick, founder of Infinex, believes in a consistent upward trend for the remainder of the year.
In summary, while Bitcoin’s path to $77,000 seems uncertain, the recent changes in Fed policy may provide a foundation for future Market growth. Investors are advised to stay updated and conduct their own research before making any trades.
Relevant Tags: Bitcoin, Federal Reserve, quantitative easing, cryptocurrency Market, liquidity pressure.
What does it mean that Bitcoin might hit a bottom at $77K?
Analysts believe that Bitcoin could drop to $77,000 before it starts to rise again. This means they think this price could be the lowest point for a while.
Why do analysts think Quantitative Tightening (QT) is ‘effectively dead’?
QT is when the central bank reduces the money supply to slow down inflation. Analysts say it’s ‘effectively dead’ because they believe economic conditions are no longer favorable for this strategy.
How does QT being ‘dead’ impact Bitcoin and other cryptocurrencies?
When QT is not happening, it can lead to more money circulating in the economy. This could create more interest and investment in Bitcoin and other cryptocurrencies, possibly pushing prices higher.
What should investors do if Bitcoin reaches $77K?
If Bitcoin drops to $77K, some investors may consider this a good buying opportunity. However, it’s important for investors to do their research and think about their own risk tolerance.
Are there other factors that might affect Bitcoin’s price besides QT?
Yes, several factors can influence Bitcoin’s price, including Market demand, investor sentiment, regulation changes, and global economic conditions. Keeping an eye on these can help investors make better decisions.