Recent interest rate cuts by major global central banks could trigger a new bullish wave for Bitcoin and shitcoins. Arthur Hayes, co-founder of BitMEX, says these moves mark the start of a cycle of global monetary easing, providing major opportunities for crypto investors.
The economic context favorable to cryptos
Arthur Hayes, co-founder of BitMEX, recently released a statement asserting that recent interest rate cuts by the Bank of Canada and the European Central Bank signal the start of a cycle of global monetary easing. According to Hayes, these movements will “catapult crypto out of the summer torpor of the northern hemisphere”. He maintains that “the trend is clear. Central banks are starting easing cycles, and therefore recommend investing in Bitcoin and “shitcoins”.
The Bank of Canada recently cut its benchmark rate for the first time in four years, a key move that suggests other monetary authorities could soon follow. In response to the announcement, the price of Bitcoin rose 1.5% to $71,600, its highest level since March, before stabilizing at $70,930. This economic backdrop is particularly favorable for cryptos like Bitcoin, which have historically performed well when the cost of borrowing is low and the supply of fiat currency is increasing.
Arthur Hayes' Perspectives and Strategies
Arthur Hayes also detailed his investment strategies in the face of these monetary changes. He indicated that he planned to turn away from Ethena's synthetic stablecoin USDe and towards “conviction shitcoins” – tokens with almost zero value and the same coins that he prefers not to name until he has completed his purchases. In his own words, “For the Maelstrom wallet projects that have asked for my advice on when to launch their tokens, I say: Let's Fucking Go! »
Historically, risk assets like Bitcoin have performed well when borrowing costs were low and the supply of fiat currency increased. Hayes points out that this trend could repeat itself. For example, between March 2020 and April 2021, after the US Federal Reserve lowered its key rate to 0.25%, Bitcoin had climbed from less than $4,000 to $64,000. This kind of movement could well happen again if central banks continue to reduce their interest rates.
However, most analysts believe that the Federal Reserve will not immediately follow its global counterparts due to persistent inflation in the United States. Despite this, Hayes believes geopolitical pressure could force a devaluation of the dollar, making a future interest rate cut likely. In contrast, he predicts that the Bank of England could surprise markets by cutting rates on June 20, under pressure from the United States to maintain the strength of the Japanese yen.
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