Arthur Hayes says he’s purchased a Bitcoin (BTC) put option with a $35,000 strike price that expires on March 29.
The BitMEX founder says on the social media platform X that the flagship crypto is looking “heavy” and will likely drop below the $40,000 mark as markets brace for the U.S. Treasury’s announcement at the end of the month detailing Treasury auctions and the new debt that will be issued.
“BTC looks mad heavy. I think we break $40,000. I went long some 29 Mar $35,000 strike puts. I think we dump into the 31 January US Treasury quarterly refunding announcement. Is Janet Yellen or Talkin’?”
Hayes says that BTC has become uncorrelated from the S&P 500 (SPX) to the downside, suggesting that the event at the end of this month may end up being bearish for Bitcoin.
“Why has SPX and BTC stopped moving up together post US BTC ETF launch?
Both love more $ [liquidity]. Which one is right about the future?
BTC is telling us that there are hiccups ahead for $ liq, next signpost is 31st January US Treasury refunding announcement.”
Hayes has also previously stated that the end of the Bank Term Funding Program (BTFP) on March 12th would likely cause a sharp correction in Bitcoin and other risk assets. However, he also says such a market correction could force the Federal Reserve to ease monetary policy and consequently help Bitcoin recover its losses.
The BTFP expires on March 12th, and the Fed rate decision is announced on March 20th. There are six trading days between these two crucial decision points. If my forecast is correct, the market will bankrupt a few banks within that period, forcing the Fed into cutting rates and announcing the resumption of the BTFP.
Bitcoin initially will decline sharply with the broader financial markets but will rebound before the Fed meeting. That is because Bitcoin is the only neutral reserve hard currency that is not a liability of the banking system and is traded globally.
Bitcoin knows that the Fed ALWAYS responds with a liquidity injection when things get bad. It might be called something new to confuse those who get their news from TikTok, but rest assured Bitcoin knows printed money in whatever guise is always printed money. Therefore, Bitcoin will rise sharply before and into the Feds eventual capitulation to restarting money printer go brrr.
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