Crypto Bull Run Set To Return Next Week, Predicts Arthur Hayes

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As an experienced financial analyst, I find Arthur Hayes’ insights on the potential effects of US economic policies on the crypto market to be both insightful and intriguing. With his extensive background in traditional finance and digital assets, Hayes offers a unique perspective that is highly regarded within the industry.

Arthur Hayes, the co-founder and ex-CEO of BitMEX, shared his perspectives on the economic situation in the US and its possible implications for the crypto market through X. Known for his astute observations and expertise in both conventional and digital finance, Hayes’s analysis is highly sought after by players within the industry.

Why The Crypto Bull Run Will Return As Soon As Monday

As a researcher examining financial data, I came across an intriguing observation made by Hayes in a recent post. He reported a substantial increase in the Treasury General Account (TGA), explaining that this surge was primarily due to an influx of around $200 billion from tax receipts. In simpler terms, my analysis revealed that the TGA had gained approximately $200 billion as a result of incoming tax revenues, paving the way for further exploration into how this development might influence financial markets.

Hayes then shifted focus to upcoming decisions by US Treasury Secretary Janet Yellen concerning the management of the TGA. With a tone mixing respect and sternness, he outlined several potential scenarios, each with profound implications for market liquidity. “Forget about the May Fed meeting. The 2Q24 refunding announcement comes out next week. What games will [Janet] Yellen play, here are some options,” Hayes remarked.

Initially, it was proposed that by halting the issuance of treasuries and exhausting the Treasury General Account (TGA), Yellen could introduce a $1 trillion infusion into the economy. This approach would entail utilizing the existing funds in the TGA for federal expenditures without adding new debt, thereby increasing the money supply directly.

I noticed that Hayes proposed a strategy to swap more borrowing for T-bills, implying a withdrawal from the RRP (Reverse Repurchase Agreement) facility. By choosing shorter-term Treasury bills instead of longer-term debt instruments, the government would secure lower interest rates but boost the frequency of issuing securities. Consequently, this move could divert funds from the overnight reverse repo market, where financial institutions often deposit surplus cash for temporary storage.

According to Hayes, merging these two strategies could result in a substantial $1.4 trillion infusion of funds if Yellen chooses to halt long-term bond sales and boost bill issuance, simultaneously depleting both the TGA and RRP accounts. Hayes strongly emphasized, “The Fed holds less power in this economic climate, Yellen is a formidable figure, show her respect.” This remark highlights his conviction that the influence of Treasury actions outweighs that of Federal Reserve policies under the current circumstances.

I observed Hayes making predictions about potential market outcomes. He expressed his belief that certain actions could trigger a bullish reaction in the stock market and significantly fuel the ongoing crypto market bull run. In other words, if any of these events transpired, be prepared for a surge in stock prices and a renewed acceleration in the crypto market’s upward trend.

The consequences of these fiscal tactics are not insignificant. With more available funds, the attraction of low-yield investments like bonds often wanes, leading investors to seek greater returns in riskier assets such as stocks and cryptocurrencies. Additionally, a change in investor sentiment toward taking on risks could result in large inflows of capital into the crypto market, which is perceived as an emerging, high-growth yet volatile investment opportunity.

To summarize, Hayes’ analysis indicates that next week, specifically from April 29 onwards with the refunding announcement, is likely to be significant for market observers. Based on his extensive financial knowledge, he suggests a potential turning point in US fiscal policy which could have far-reaching implications for global markets. For crypto investors, these events may serve as crucial indicators, highlighting the importance of staying informed and prepared to adapt to emerging economic cues.

At press time, BTC traded at $64,483.

Crypto Bull Run Set To Return Next Week, Predicts Arthur Hayes

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2024-04-26 10:34