Bitcoin (BTC) Price to Drop Below $40,000, Predicts Arthur Hayes

Arthur Hayes, the co-founder of the BitMEX cryptocurrency exchange, has adopted a pessimistic view of Bitcoin, predicting a decline in its value below the $40,000 threshold. `

In response to this outlook, Hayes has acquired put options set with a strike price of $35,000, set to mature on March 29.

BitMEX Co-Founder Invests Put Options

Arthur Hayes shared his shift in sentiment on X today, predicting a decline in Bitcoin. He cited the upcoming US Treasury quarterly refunding announcement as a contributing factor to his revised outlook.

$BTC looks mad heavy. I think we break $40k. I went long some 29Mar $35k strike puts. I think we dump into the 31Jan US Treasury qtly refunding annc. Is Janet Yellen or Talkin’? pic.twitter.com/lyjqNmldzh

— Arthur Hayes (@CryptoHayes) January 22, 2024

Hayes is reported to have potentially invested in put options for 0.025 BTC per share, totaling 5 BTC and valuing his overall investment at around $203,620. This trade underscores his confidence in the anticipated near-term movement of Bitcoin, as put options represent a noteworthy speculative position in the volatile crypto market.

Moreover, Hayes forecasts that Bitcoin’s decline will persist until the US Treasury quarterly refunding announcement on January 31.

Hayes $1.3 Trillion Surge Prediction

While today’s update from Hayes presents a somber outlook, his January 16 forecast painted a more optimistic picture, suggesting that the total market capitalization for Bitcoin (BTC) and other digital assets could experience a significant surge of over $1.3 trillion in the current year.

As a seasoned figure in the crypto space, Hayes projected that by 2024, the total market capitalization for all digital assets might not only reach but surpass the previous all-time high (ATH) set in 2021.

The anticipated increase is expected to occur around March, coinciding with potential actions by the Federal Reserve to inject more liquidity into the market. Historically, such moves by the Fed have led to rallies in risk assets, including Bitcoin.

Hayes envisions that the Federal Reserve could announce rate cuts in March and renew the Bank Term Fund Program (BTFP). The BTFP, initiated last year during the peak of the banking crisis, was designed to provide liquidity to struggling banks facing challenges in meeting withdrawal demands.

Subsequent to Hayes’s statement, the BTC price experienced a decline, reaching $40,500, and currently stands below $41,000, reflecting a 2.6% decrease in the last day and a 4.5% decline over the past week.

Additionally, the trading volume has surged by 53% in the last 24 hours, indicating heightened interest among traders.