TOKEN2049 Singapore: Arthur Hayes Predicts Market Crash Before Bull Run on Rate Cut

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Shalini Nagarajan

Crypto Reporter

Shalini Nagarajan

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Shalini is a crypto reporter who provides in-depth reports on daily developments and regulatory shifts in the cryptocurrency sector.

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Last updated:

September 18, 2024 03:31 EDT

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Arthur Hayes, BitMEX co-founder and CIO at Maelstrom, shared his insights on the macroeconomic landscape and its impact on crypto markets during a keynote speech at the TOKEN2049 conference in Singapore on Wednesday.

His address, titled “Thoughts on Macroeconomics Current Events,” offered a complex view of the financial future. He predicted a major market collapse linked to Federal Reserve actions, followed by the start of a new bull market.

On Wednesday, the Fed is poised to cut interest rates for the first time since COVID-19. Global investors, despite expecting the move, anticipate significant effects.

Fed’s Rate Cut Decision Criticized by Hayes, Predicting Imminent Market Collapse

Hayes critiqued the Fed’s decision to cut rates amidst high government spending and persistent inflation above target levels.

He argued that this move, while anticipated by many, could instead lead to a market collapse. “The market will collapse a few days after the rate adjustment,” Hayes said, attributing this to a narrowing of the interest rate differential between the US dollar and the Japanese yen.

He then shifted focus to how various assets would fare in this new interest rate environment. Hayes highlighted Ethereum (ETH), among others like ENA, ETHFI, and PENDLE, as potential winners due to their suitability in a declining treasury yield scenario.

He revealed he holds significant positions in these assets, but does not invest in ONDO. Hayes also said that Maelstrom’s portfolio is strategically aligned to thrive in a falling interest rate environment.

Arthur Hayes Disputes Ethereum Naysayers, Predicts It Will Outperform Bonds and Dollar Post-Bull Market

Additionally, Hayes disputed a narrative about Ethereum’s lackluster performance. He described Ethereum as an “Internet bond” offering a 4% yield. He posited that if Treasury yields drop significantly, Ethereum could become a more appealing investment.

“The gains in Ethereum will exceed the gains in the US dollar and the gains in Treasury bonds,” Hayes predicted, setting the stage for a dramatic market shift.

He predicted that after a market drop due to the Fed cutting rates, a new bull market would start, indicating a potentially profitable time for investors, particularly those invested in assets like Ethereum.