Buy Crypto In May, Go Away: Arthur Hayes Shares His Top Altcoin Picks
May 03 2024 - 2:20AM
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In his most recent publication dated May 2, 2024, Arthur Hayes, the
founder of exchange BitMEX, shared his insights into the crypto
market’s recent tumultuous behavior and the broader macroeconomic
signals shaping potential future trends. Titled “Mayday,” his essay
directly addresses the crypto market, which has experienced
significant volatility since mid-April. Stealth Money Printing Is
Commencing Hayes begins by noting the observable distress in the
crypto markets, which he attributes to a confluence of factors
including the end of the US tax season, anticipatory fears about
Federal Reserve policy decisions, the Bitcoin halving event, and
stagnating growth in the assets under management (AUM) for US
Bitcoin exchange-traded funds (ETFs). He interprets these factors
as a necessary purge of speculative excess, stating, “The tourists
will sit out the next phase on the beach… if they can afford it. Us
hard motherfuckers will hodl, and if possible, accumulate more of
our favorite crypto reserve assets such as Bitcoin and Ether,
and/or high-beta shitcoins like Solana, Dog Wif Hat, and dare I say
Dogecoin (the OG doggie coin).” Related Reading: Crypto Prediction
Website Reveals When The Cardano Price Will Reach $45 A significant
portion of Hayes’ analysis focuses on the Federal Reserve’s recent
adjustment to its quantitative tightening (QT) program. Previously
set at a reduction of $95 billion per month, the Fed has dialed
this back to $60 billion. Hayes interprets this as a covert form of
quantitative easing, injecting an additional $35 billion per month
into the dollar liquidity pool. He explains, “When you combine the
Interest on Reserve Balances, RRP payments, and interest payments
on US Treasury debt, the reduction in QT increases the amount of
stimulus provided to the global asset markets each month.” Hayes
also scrutinizes actions by the US Treasury, particularly under
Secretary Janet Yellen. He discusses the Treasury’s Quarterly
Refunding Announcement (QRA), which outlines the expected borrowing
and cash balances for upcoming quarters. For Q2 2024, the Treasury
anticipates borrowing $243 billion, a figure Hayes points out is
$41 billion higher than the previous forecast, due to
lower-than-expected tax receipts. He predicts this increased supply
of Treasuries could lead to higher long-end rates, a situation
Yellen may counter with yield curve control measures—a scenario
that could catalyze a significant rally in Bitcoin and crypto
prices. Related Reading: Ethereum “Has Been A Major
Disappointment”: Trader Weighs In On This Crypto Cycle Hayes
touches on the failure of Republic First Bank, emphasizing the
response by monetary authorities as a key indicator of systemic
fragility. He criticizes the federal safety net that ensures all
depositors are made whole, arguing that it masks deeper
vulnerabilities within the US banking system and leads to a stealth
form of money printing, as uninsured deposits are effectively
guaranteed by the government. This, Hayes argues, is a fundamental
misalignment that could lead to significant inflationary pressures.
Buy Crypto In May, Go Away Hayes is candid about his investment
strategies in the current environment. He advocates buying now.
“I’m buying Solana and doggie coins for momentum trading positions.
For longer-term shitcoin positions, I’m upping my allocations in
Pendle and will identify other tokens that are ‘on sale.’ I will
use the rest of May to increase my exposure. And then it’s time to
set it, forget it, and wait for the market to appreciate the
inflationary nature of the recent US monetary policy
announcements.” He concludes with a broad prediction that, despite
the market’s recent volatility, the underlying liquidity conditions
created by US monetary and fiscal policies will provide a floor for
crypto prices, leading to a gradual upward trend. “While I don’t
expect crypto to fully realize the recent US monetary
announcements’ inflationary nature immediately, I expect prices to
bottom, chop, and begin a slow grind higher,” he states, signaling
his bullish outlook. For Bitcoin, Hayes predicts that the premier
cryptocurrency will recapture the key $60,000 level and then move
in a range between $60,000 and $70,000 until August because of the
annual summer lull. At press time, BTC traded at $59,393. Featured
image from Onooki, chart from TradingView.com
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