Former BitMEX CEO Arthur Hayes believes that bitcoin (BTC) may have just survived the current down cycle. According to him, the “irresponsible entities” that needed to be flushed out have all been. Therefore, he believes that things can only get better for BTC from here on out.
Arthur Hayes, who spoke in a recent interview with popular podcaster Scott Melker, also felt that the so-called irresponsible entities have all exhausted their supply of BTC for sale. He stated:
“Looking forward, pretty much everyone who could go bankrupt has gone bankrupt.”
Arthur Hayes justifies his position on bitcoin
Further illuminating his position, Arthur Hayes explains that it is common for centralized lending companies (CELs) to first ask for loans, especially in the case of financial difficulties. Then, they often choose to sell their BTC, which is usually used as a “reserve asset“. According to the crypto-currency enthusiast, this is why a look at the balance sheets of any of these failed companies will show that there is no Bitcoin. The reason, he says, is that they had to sell their Bitcoins when they went bankrupt.
Recall that in a previous blog post, Arthur Hayes also expressed a similar argument. In that post, he claimed that BTC were being traded in large quantities. This was even as LECs were trying to avoid bankruptcy and indebted trading companies were struggling to liquidate their positions.
Meanwhile, Hayes also admits that he has no evidence that this is exactly what happened with the failed firms. Nevertheless, he believes it was the only reasonable thing for them to do, given the circumstances. He stated:
“There is no reason for you to hang on if you were in dire need of fiat.”
Excited for 2023
Without a doubt, the recent collapse of the FTX crypto exchange has seen things go from bad to worse for the crypto market. However, Arthur Hayes believes that 2023 could mark some recovery for the market. He believes that with the Fed’s continued tightening of monetary policy, it’s only a matter of time before the US Treasury market becomes dysfunctional. And if that happens, Arthur Hayes believes the Fed will have no choice but to turn on the printing bank, in which case, bitcoin and all other risky assets will explode.