Former BitMEX CEO believes the Bitcoin price has touched bottom after most “irresponsible entities” had sold all of their Bitcoin.
The former CEO of crypto derivatives platform BitMEX, Arthur Hayes, believes the worst is over for Bitcoin this cycle because the “biggest most reckless companies” have ran out of BTC to sell.
“In the future, “pretty much everyone who might go bankrupt has gone bankrupt,” he stated in an interview with crypto enthusiast and podcaster Scott Melker on December 11.
Hayes further on his position by stating that when centralized lending businesses (CELs) have financial difficulties, they would often call in loans first, then sell BTC first since it functions as the “reserve asset of crypto” and “the most pure asset and the most liquid.”
“When you look at the balance sheet of any of these heroes, there’s no Bitcoin on it because they sold the Bitcoin as they were about to go bankrupt, or they sold the Bitcoin during the wave before they went bankrupt.”
In a Dec. 10 blog post, Hayes made a similar point, noting that as the “credit crisis” continues, huge physical sales of BTC are taking place on exchanges from both CELs attempting to escape bankruptcy and trading businesses that have had loans revoked and must liquidate their holdings.
“This is why Bitcoin prices plummet before CELs go bankrupt. That is the significant change “He said.
“I can’t confirm that all of the Bitcoin owned by these failing institutions was sold during the successive falls, but it seems that they did their utmost to sell the most liquid crypto collateral they could immediately before they went under.”
Hayes, on the other hand, feels the large-scale liquidations are coming to an end, writing in a blog post that “there is no reason why you would hang on if you had an urgent need for fiat.””
The industry is now in the clutches of a crypto winter after the collapse of crypto exchange FTX and the attendant turmoil, but Hayes thinks the sector might see some rebound in 2023.
“I think the US Treasury market will become dysfunctional at some point in 2023 as a result of the Fed’s tightening monetary policies,” he said. “At that moment, I anticipate the Fed to switch on the printing bank, and then boom shaka-laka — Bitcoin and all other risk assets will rocket higher.”