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BitcoinBTC and cryptocurrencies—including top ten coins ethereum, XRPXRP and solana—have fallen sharply despite a huge $10 trillion bitcoin price bet.
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The bitcoin price has dropped almost 10% over the last 24 hours, weighing on the price of ethereum, XRP, solana and other top ten cryptocurrencies, wiping around $100 billion from the combined crypto market following its bitcoin spot exchange-traded fund (ETF) surge.
Ahead of the bitcoin price crash, legendary bitcoin and crypto trader Arthur Hayes had warned the Federal Reserve could be about to trigger a 30% bitcoin price crash—predicting “a vicious washout” in coming months.
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“I am preparing for a vicious washout of all the crypto tourists in March of this year,” Hayes, the chief investment officer of family office Maelstrom and the former chief executive of the bitcoin derivatives pioneer exchange BitMex, wrote in a blog post.
“I loaded up on crypto in the second half of 2023, and I believe now until April is a no-trade zone in terms of the addition of risk.”
The bitcoin price could crash between 20% to 30%, according to Hayes, due to “a dollar liquidity rug pull.” However, he said he expected the bitcoin price to quickly rebound due to the Federal Reserve restarting its money printer.
“Bitcoin initially will decline sharply with the broader financial markets but will rebound before the Fed meeting,” Hayes said. “That is because bitcoin is the only neutral reserve hard currency that is not a liability of the banking system and is traded globally.”
The 2022 bitcoin price crash, which wipes $2 trillion from the bitcoin, ethereum, XRP, solana and crypto market, was widely attributed to the Federal Reserve ramping up interest rates and reducing its balance sheet in response to soaring inflation that risked spiralling out of control.
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The bitcoin price rebounded sharply in 2023, however, picking up pace as the BlackRockBLK-led Wall Street bid to bring a spot bitcoin ETF to market neared it’s culmination this week, with the U.S. Securities and Exchange Commission (SEC) waving a raft of funds through.
“The approval of spot bitcoin ETFs is still a ‘sell the news’ event, but we believe it will be very shallow in the near term” CK Zheng, chief investment officer at crypto hedge fund ZX Squared Capital. “If there is any material pullbacks in the bitcoin price during the short term, we believe it will be a great opportunity to add significantly more long positions.”
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