Arthur Hayes Predicts Economic Trouble as U.S. Market Declines

2 mins mins

Key Points:

Simultaneous declines in U.S. stocks and Treasury yields indicate market panic.
Federal Reserve might employ quantitative easing as a response to liquidity issues.
Bitcoin dominance is expected to rise as a hedge against economic instability.

Bitcoin (BTC) currently trades at $77,267.37, holding a market cap of $1.53 trillion, with a dominance of 62.49%. Notably, BTC experienced a 2.35% price drop over 24 hours and a 9.07% decline in the past week, according to CoinMarketCap. Current circulating supply stands at 19,848,771 BTC.

Coincu analysts foresee potential Federal Reserve support for financial markets. Such interventions could replicate COVID-19-era monetary measures, affecting the crypto landscape. Hayes’ expectation of Bitcoin dominance increasing aligns with perceived economic instability and shifting regulatory focus.

Bitcoin as a Safe Haven Amid U.S. Economic Woes

If liquidity issues persist, the Federal Reserve might resort to quantitative easing again. Hayes forecasts a rise in Bitcoin dominance as a hedge against instability, expecting BTC to play a more significant role as a “safe haven” asset.

The market responded with uncertainty, as investors noted his insights about potential monetary policy failures. Hayes argues the evolving situation boosts Bitcoin’s standing among cryptocurrencies, as evidenced by institutional Bitcoin accumulation by whales and declining altcoin activity.

“If the export of dollar earnings decreases, it will lead to a lack of capital inflow into the U.S. market, which cannot support the purchase of Treasury bonds and stocks, signaling that ‘the game is over’.