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The recent interest rate cuts by major central banks around the world could trigger a new bullish wave for Bitcoin and “shitcoins.” Arthur Hayes, co-founder of BitMEX, claims that these moves mark the beginning of a global monetary easing cycle, offering major opportunities for crypto investors.
The economic context favorable to cryptos
Arthur Hayes, co-founder of BitMEX, recently released a statement asserting that the recent interest rate cuts by the Bank of Canada and the European Central Bank signal the start of a global monetary easing cycle. According to Hayes, these moves will “catapult crypto out of the summer doldrums of the northern hemisphere.” He argues that “the trend is clear. Central banks are starting easing cycles,” and thus recommends investing in Bitcoin and “shitcoins.”
The Bank of Canada recently cut its key interest rate for the first time in four years, a key move that suggests other monetary authorities may soon follow. In response to this announcement, the price of Bitcoin rose by 1.5% to reach $71,600, its highest level since March, before stabilizing at $70,930. This economic context is particularly favorable for cryptos like Bitcoin, which have historically performed well when borrowing costs are low and the supply of fiat money is on the rise.
The perspectives and strategies of Arthur Hayes
Arthur Hayes also detailed his investment strategies in the face of these monetary changes. He indicated that he planned to move away from the synthetic stablecoin USDe from Ethena in favor of “conviction shitcoins” – near-worthless tokens and meme coins that he prefers not to name until he has completed his purchases. In his own words, “For the Maelstrom portfolio projects that 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 money was increasing. Hayes notes that this trend could repeat itself. For example, between March 2020 and April 2021, after the U.S. Federal Reserve lowered its key interest rate to 0.25%, Bitcoin climbed from less than $4,000 to $64,000. Such a move could very well happen again if central banks continue to cut their interest rates.
However, most analysts expect that the Federal Reserve will not immediately follow its global counterparts due to persistent inflation in the United States. Despite this, Hayes believes that 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 the markets by cutting its rates on June 20, under pressure from the United States to maintain the strength of the Japanese yen.
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Diplômé de Sciences Po Toulouse et titulaire d’une certification consultant blockchain délivrée par Alyra, j’ai rejoint l’aventure Cointribune en 2019.
Convaincu du potentiel de la blockchain pour transformer de nombreux secteurs de l’économie, j’ai pris l’engagement de sensibiliser et d’informer le grand public sur cet écosystème en constante évolution. Mon objectif est de permettre à chacun de mieux comprendre la blockchain et de saisir les opportunités qu’elle offre. Je m’efforce chaque jour de fournir une analyse objective de l’actualité, de décrypter les tendances du marché, de relayer les dernières innovations technologiques et de mettre en perspective les enjeux économiques et sociétaux de cette révolution en marche.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.