Arthur Hayes Warns Bitcoin Could Dip to $100K, Here’s Why

Arthur Hayes, the former CEO of BitMEX, has surprised the market with a negative short-term view on Bitcoin (BTC) and Ethereum (ETH). Although he has been a strong advocate for the crypto industry, Hayes now predicts that Bitcoin could drop below $100,000 due to a disappointing U.S. Non-Farm Payroll (NFP) report.

Arthur Hayes Offloads Some of His Assets

The outspoken co-founder shared his worries about challenges facing the crypto market. He affirmed that the disappointing U.S. jobs data shows slower economic growth, which could lower liquidity and make investors less willing to take risks with assets like Bitcoin. 

Although Hayes is still positive about Bitcoin’s long-term potential, he cautioned that prices could drop significantly in the short term, especially if market sentiment weakens further.

Hayes also warned that Ethereum could drop below $3,000 soon due to ongoing selling pressure and uncertainty in the market. As of the time of writing, Bitcoin is trading at $112,779.32, while Ethereum is trading at $3,450.30, according to CoinMarketCap data.

Meanwhile, in a related move, he sold off 2,373 ETH ($8.32 million), 7.76 million ENA ($4.62 million), and 38.86 billion PEPE ($414,700) tokens. This large sale sparked a lot of discussion in the crypto community, with many seeing it as a sign of a possible decline or a shift in his investment strategy due to market conditions.

Hedge Funds Could Trigger a Bitcoin Sell-Off

In February, Arthur explained that the BTC rally may face a serious test as hedge funds began unwinding their trades in U.S. spot Bitcoin exchange-traded funds (ETFs). He further explained that many hedge funds holding Bitcoin ETFs, such as BlackRock’s iShares Bitcoin Trust (IBIT), have executed a basis trade.

However, with Bitcoin’s recent price fluctuations, this basis spread has narrowed to levels similar to short-term U.S. Treasury yields. 

As a result, Hayes believes these funds are likely to unwind their positions, selling ETF shares and covering their CME futures shorts. If done at scale, this could create a chain reaction of selling pressure, driving BTC price back down to $70,000.

Arthur Hayes Predicts Stablecoin Bubble

Recall that the co-founder also issued a stark warning to investors following Circle’s successful public listing. He predicted that the market had entered a phase of “stablecoin mania” that could end in widespread failures and financial losses. 

As reported by BitcoinLinux, Hayes expressed skepticism about a potential wave of copycat stablecoin companies aiming to replicate Circle’s (CRCL) IPO success. He foresees a situation where companies attract massive investments by using financial tricks, excessive leverage, and flashy marketing, but ultimately lack a solid foundation. 

“The bubble will pop after a stablecoin issuer convinces investors to part with tens of billions, only to collapse,” he warned.

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