Arthur Hayes foresees a sharp Bitcoin decline due to global economic factors but predicts a new all-time high by year-end.
Arthur Hayes Predicts Bitcoin Decline and Recovery
Arthur Hayes, the former CEO of BitMEX, has issued a warning about Bitcoin’s near-term outlook. He predicts a dramatic price drop but believes the cryptocurrency will rebound to reach new highs before the end of the year.
While unrelated to the recent DeepSeek-driven market crash, Hayes suggests these events could act as a catalyst for Bitcoin’s decline.
Hayes Warns of a Mini-Financial Crisis
Hayes recently revised his earlier prediction, which anticipated Bitcoin’s price peak in March. Now, he believes Bitcoin is on the brink of a severe downturn. In a detailed blog post, he explained how global economic stressors are creating unfavorable conditions for fiat-based assets like Bitcoin.
Key factors include:
- Rising US 10-Year Treasury Yields
- A tightening Federal Reserve policy
- Decreased money printing in the US, China, and Japan
These factors, according to Hayes, have heightened financial stress globally, causing a liquidity crunch. Bitcoin, which he claims is sensitive to liquidity conditions, could face significant headwinds as a result.
DeepSeek’s Role in Market Turmoil
Although Hayes’ initial bearish outlook was unrelated to DeepSeek, the emergence of this Chinese AI protocol has reinforced his concerns. DeepSeek’s rise caused significant sell-offs in crypto markets, impacting firms like MicroStrategy, which had recently purchased large amounts of Bitcoin.
Despite the turbulence, Hayes believes this crash amplifies existing trends rather than introducing new threats.
Long-Term Optimism Amid Short-Term Pain
While Hayes expects Bitcoin’s price to dip further in the short term, he remains optimistic about the long-term outlook. He predicts that temporary financial stress will lead to even greater gains for Bitcoin by year-end.
Hayes also critiqued global economic policies and their impact on Bitcoin. He suggested that the Federal Reserve’s tightening measures and geopolitical agendas could interfere with coherent crypto regulation.
In the meantime, Hayes advises caution, as the upcoming price drop could prove painful for investors.
