Arthur Hayes Turns Bullish on Bitcoin (BTC) After Accurately Predicting Its Dip Below $80,000

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.

After accurately forecasting a Bitcoin (BTC) dip below $80,000, former BitMEX CEO Arthur Hayes is now turning bullish and predicts that the flagship cryptocurrency will hit $110,000.

In a March 24 post on X , Hayes projected that Bitcoin would undergo a final descent to around $76,500, the recent multi-month low, before embarking on a rally to $110,000.

His optimism stems from upcoming macroeconomic shifts, which he believes would propel Bitcoin higher after a period of consolidation.

"I don't care about tariffs, they are minimal in the near term. My thinking is that the Fed will transition out of QT for both Treasuries and Agency MBS in April or May. This will drive liquidity toward financial markets," said Hayes.

He further explained that the Federal Reserve is currently selling more assets than it buys through Quantitative Tightening (QT), a measure that reduces the liquidity in the financial system.

However, Hayes said that the Fed is expected to transition out of QT and begin Quantitative Easing (QE), which occurs when a central bank creates new money to purchase assets in the open market.

This move would inject fresh liquidity into the financial system, potentially driving up asset prices as institutions and individuals seek out investment opportunities.

"The interesting thing is that usually, when the Fed transitions out of QT, we see a move lower in rates. But this time, perhaps due to the banking crisis or sticky inflation, we might not see that classic pattern," said Hayes.

"Maybe they cut rates at the May FOMC meeting. We'll see how the economic data plays out."

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 in May, further strengthening the case for increased liquidity.

Historically, QE has resulted in higher spending power among consumers, leading to increased demand for goods and services.

During the COVID-19 pandemic, aggressive Fed stimulus measures fueled 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.