Key Takeaways
- Arthur Hayes predicts Bitcoin will reach a new all-time high amid the Federal Reserve’s shift away from Quantitative Tightening.
- The Fed’s expected move toward Quantitative Easing in May could inject additional liquidity into markets.
- Bitcoin surged 4% following Fed Chair Jerome Powell’s speech, signaling bullish sentiment.
After accurately forecasting Bitcoin’s (BTC) dip below $80,000, Arthur Hayes is now turning bullish.
The former BitMEX CEO believes Bitcoin has bottomed out at around $77,000 and is on track to reach a new record high before undergoing another correction.
Bitcoin To Hit New All-Time High
In a March 24 post on X , Hayes projected that Bitcoin would climb to $110,000 before revisiting the $76,500 level, the recent multi-month low.
His optimism stems from upcoming macroeconomic shifts.
Hayes pointed out that the Federal Reserve is transitioning from Quantitative Tightening (QT) to Quantitative Easing (QE) for treasuries, a move that historically drives liquidity into financial markets.
Additionally, he dismissed concerns over tariffs, stating they would have little impact in the near term.
QT, the process of reducing the Fed’s balance sheet by selling assets or letting bonds mature, is a contractionary measure aimed at controlling inflation.
QE, by contrast, expands the money supply, injecting capital into the economy and stimulating investment.
Hayes argues that the Fed’s pivot toward easing monetary policy could provide the bullish catalyst Bitcoin has lacked in recent months.
Fed’s Policy Shift Could Inject Liquidity Into Crypto Markets
Fed Chair Jerome Powell has indicated that QT will be reduced from $25 billion per month to $5 billion per month starting in April.
Market analysts on Polymarket are now pricing in a 100% likelihood that QT will end before May, raising expectations for QE to follow.
If this transition materializes, the influx of capital could propel Bitcoin and the broader crypto market higher, fueling the next leg of the bull cycle.
Some analysts believe that an interest rate cut could also be on the table at the Fed’s next Federal Open Market Committee (FOMC) meeting, further strengthening the case for increased liquidity.
Historically, QE has resulted in higher spending power among consumers.
During the COVID-19 pandemic, aggressive Fed stimulus measures led to an unprecedented surge in crypto prices as excess liquidity found its way into risk assets. A similar trend could play out if QE returns.
Bitcoin responded strongly to Powell’s recent comments, rallying 4.5% in the past 24 hours. The broader crypto market followed suit, with altcoins seeing gains after weeks of stagnation.
With the Fed’s policy in focus, all eyes are now on Bitcoin’s next move as it approaches key resistance levels.
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