While the crypto community is in panic on the wake of three crypto-friendly banks folding up, former CEO of derivatives exchange BitMEX, Arthur Hayes believes the bull market is about to commence.
Hayes mentioned in a tweet on 12th March that the crypto market should get set for a rally of crypto assets which are usually referred to as risk assets. In a follow up tweet today, Hayes asked if his over 350,000 followers were ready for the bull market.
“Are you ready for the mother fucking bull market?”, he wrote.
Rally Due to More Money Printing
The crypto market is believed to prosper whenever the U.S Fed prints more money. This is because of the increasing inflation caused by such printing, which makes more investors to run to crypto assets.
Hayes’ initial tweet was in response to a headline implying that the Fed and treasury department are considering printing more money to protect financial institutions that were heavily invested in Silicon Valley Bank (SVB). SVB is one of the three banks that have closed down in less than one week.
An example of a time when money printing led to a crypto rally was in 2019 when the COVID pandemic hindered many from earning a living. As a result, the Fed printed more money to cushion the effect of the pandemic, which led to inflation that made crypto more attractive.
If such printing is done again to cushion the effect of the bank closures, the effect of the COVID pandemic on crypto may repeat itself, which would lead to a bull run.
Is the Crypto Market Ready?
The closing of the three banks caused a shock in the market that could have led to the drop in the price of Bitcoin below $20,000 on 10 March. The market has recovered slightly though, with Bitcoin back over $22,000, but is the market ready for Hayes’ predicted bull run?
The USDC depegging has created a ripple effect that now affects crypto establishments, and it isn’t clear if we’ve seen the end of it. If more crypto-related institutions should go down, this may create a negative sentiment that may take a while to recover from, thus delaying any possible bull market.
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