Fed's Potential Mistake

BitMEX co-founder Arthur Hayes believes the Federal Reserve is making a "colossal mistake" by considering cutting interest rates amid high US dollar issuance and government spending. He expects the rate cut to "narrow the interest rate differential between the US dollar and the Japanese yen", leading to financial stress in the markets.

Crypto Yields vs T-Bills

According to Hayes, the yields on many cryptocurrencies are "either slightly above or below the rate of T-bills", which could affect their price performance as investors opt for the lower-risk T-bills offering similar returns.

Ethereum Bull Market Ahead

However, Hayes sees the potential rate cuts as an opportunity to "reignite the Ethereum bull market", as the reduced gap between crypto yields and T-bill returns could drive more investment into riskier DeFi applications and Ethereum-based tokens.

Crypto Market Crash Warning

Overall, Hayes has warned of a short-term crypto market crash due to the expected Fed rate cut, but believes it could also pave the way for a resurgence of the Ethereum bull market in the near future.

Significant Crypto Holdings

The BitMEX co-founder disclosed that he holds significant positions in Ether, Ethena, and Pendle, expressing confidence in the upcoming ETH bull run.

Source: https://cointelegraph.com/news/arthur-hayes-market-crash-rate-cut-prediction

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