- Bitcoin’s in for a ‘violent’ crash, warns Arthur Hayes..
- Recent buyers have led the Bitcoin dump.
- Trump Trade allure has fizzled out, and Bitcoin has lost 14% of its price in the past week.
When Arthur Hayes speculated that Bitcoin could fall as low as $75,000 last month many investors probably rolled their eyes.
The leading cryptocurrency, after all, was bound to get a bounce from the Trump administration’s support for a Bitcoin strategic reserve, plus an end to the crackdown on the industry.
With Bitcoin dropping more than 5% in the last 24 hours and slipping below $79,000, Hayes’ prediction now looks prescient.
Options flashing red
On Monday, the BitMEX co-founder and crypto influencer reiterated his call for Bitcoin to slide to $75,000. Worse may be on the way.
He said the volume of open interests for options contracts at that price range was flashing red.
“An ugly start of the week,” Hayes, the chief investment officer at Maelstrom, posted online. “If we get into that range, it will be violent.”
In a way, it already is.
Investors across the capital markets are spooked by President Donald Trump’s flip-flopping tariff policies toward the US’ two biggest trading partners, Canada and Mexico.
Trump also deepened a trade war with China by ratcheting up import duties another 10%. China countered with tariffs of its own.
Crypto summit
If that wasn’t enough, Trump’s much-hyped crypto summit at the White House underwhelmed investors by setting up a Bitcoin reserve stocked with coins seized by the government in criminal cases.
Investors had been hoping Trump would order the government to start buying Bitcoin.
Zach Burks, CEO of NFT marketplace Mintology, said he expects Bitcoin to “drop as low as $72,000” amid inflation concerns for investors and the fading allure of the asset as a so-called Trump trade.
“Many investors are pulling out of Bitcoin, viewing it as a risky asset class for the first time since Trump took the White House,” Burks told DL News.
‘It’s no longer playing its role as a store of value.’
— Zach Burks, Mintology
The failure of crypto to decouple from the stock market is proving worrisome yet again during a market crisis. If anything, investors should be flocking to Bitcoin to safeguard their wealth the same way they use gold.
But investors are shunning that idea.
“It’s no longer playing its role as a store of value,” Burks said. “Gold prices have spiked as many go back to the original doomsday asset, which is no surprise as tariff grenades continue to get thrown across the free world.”
Most of the investors ditching Bitcoin are new buyers of the asset, crypto research outfit 10x Research said in a Monday report.
The report stated that these new buyers likely punted on Donald Trump’s presidency being a boon for Bitcoin and cryptocurrencies ― that hasn’t materialised.
Recovery?
Despite the present market turmoil, analysts still hold bullish expectations for Bitcoin.
Hayes previously told DL News that Trump’s policies will devalue the dollar and send Bitcoin’s price to $250,000 this year as investors return to the asset to safeguard their money.
For Burks, a Bitcoin recovery to $110,000 this year is possible.
“But we must weather this MAGA-inflicted mini recession before we get to move up the layer cake,” Burks said.
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Contact him at osato@dlnews.com.
