Arthur Hayes is once again sounding the alarm on a greater shakeup in the crypto market after worse-than-expected data from the U.S. Non-Farm Payrolls (NFP) jobs report sparked downside volatility in both traditional and digital markets. Despite his reputation as a long-term crypto bull, Hayes has recently moved assets and cash, preparing for further volatility ahead.

Hayes’ prediction comes as Bitcoin hovers in a turbulent range after a sharp June and July rally that saw the coin blast through $120,000 before encountering resistance and correcting down to below $114,000 in early August.

Hayes, a long-time advocate of Bitcoin’s macro potential, is now warning that short-term headwinds could push BTC below $100,000 and ETH below $3,000 in the aftermath of the latest jobs report, a number that fell well short of expectations and wiped $1.1 trillion from the stock market.

Risk assets sell off as Schiff reinforces ‘Bitcoin is not digital gold’

The crux of Arthur Hayes’ argument is rooted in macro liquidity. In his recent comment, he points to the spike in market volatility following the weaker-than-expected NFP, with risk assets selling off hard as traders rush to reprice interest rate expectations and the path ahead for Federal Reserve policy. For the crypto market, this unfolding reset spells trouble in the short term.

Bitcoin led the crypto downturn but managed to show relative strength compared to altcoins, which were hit even harder. Hayes points out that liquidity is being drained from markets as traders brace for further turbulence. Forced liquidations and margin calls are accelerating the move lower, with $172 million in Bitcoin long positions wiped out across exchanges in a 24-hour window as prices stumbled.

Bitcoin critic Peter Schiff wasted no opportunity to dunk on the number-one digital asset while praising the virtues of gold, commenting:

“Days like today make it clear that Bitcoin is not digital gold. We got bad economic news that sent gold and the Japanese yen up 2.2% and the euro up 1.5%. The NASDAQ went the other way, falling 2.2%. Bitcoin tanked 3%, tracking high-risk assets lower, not safe havens higher.”

Arthur Hayes is repositioning his assets

In the early hours of August 2, Hayes offloaded 2,373 ETH ($8.32 million), 7.76 million ENA ($4.62 million), and 38.86 billion PEPE ($414,700), causing a flurry of comments among the crypto community, most notably, Ethereum bulls who pointed out that Hayes had only recently been advocating for a $10K ETH. One follower commented:

“Classic Arthur shilling and dumping at the same time. Never fails.”

Hayes has been right before, predicting a BTC drop to $70,000 earlier in the current cycle when optimism and leverage were at fever pitch.

In April 2024, as Bitcoin scaled all-time highs and market euphoria peaked, Hayes issued a warning that the tides would soon turn, again calling out warning signs in liquidity, U.S. macro data, and the growing risks from overextended leverage in derivatives markets. Despite offloading ETH showing near-term caution, Hayes’ long-term view remains bullish.

Mentioned in this article

BitMEX co-founder Arthur Hayes believes the Federal Reserve is primed to inject massive liquidity into the US economy.

In an interview on the David Lin Report, Hayes says that between now and 2028, liquidity in the “realm of $9 trillion” will be injected into the US economy, initially flowing into the traditional economic sectors before trickling down to risk assets such as Bitcoin (BTC).

“…And I think the banks are going to free, because they now don’t have to hold all this equity capital against their treasury book, they can lend more into the real American economy. And so you’re going to see the amount of loans going to manufacturing firms increase, which is again… that’s an increase in credit. And that will make its way into crypto as well.”

The BitMEX co-founder says Bitcoin could skyrocket by around 139% from the current price by the end of the year. By 2028, Hayes Bitcoin could go up nearly tenfold.

“So I think that we get to $250,000 by the end of the year. It will be bumpy along the way, obviously. But that’s sort of my end-of-year price target. And then a $1 million Bitcoin.”

On why Bitcoin could outperform other risk assets amid the expected injection of liquidity, Hayes says,

“So Bitcoin has a fixed supply. It’s obviously a much smaller market in terms of market cap. And so you have a lot of things chasing a very small door, then the price goes up on the margin. And so that’s why Bitcoin has been the best performing financial asset in the last 15 years.”

Bitcoin is trading at $104,462 at time of writing.

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