Ex-BitMEX CEO Arthur Hayes has indicated a potential resurgence in the Bitcoin bull market, spurred by escalating U.S. treasury yields. In an Oct. 4 X thread, Hayes suggested that the soaring yields could trigger a new crypto bull market. He highlighted the impact of the "bear steepener" phenomenon and the ensuing economic fallout due to increasing interest rates.
Hayes also projected a revival of substantial liquidity injections to alleviate the financial strain on crypto markets, which have been under pressure from quantitative tightening since late 2021. This expectation is grounded in the potential for Federal Reserve money printing aimed at rescuing government bond markets.
Hayes pointed to a "bear steepener" in the bond market and rising long-term bond interest rates as key factors influencing this shift. The rising 2s30s curve, Federal Reserve's hawkishness, and recent interest rate hikes are affecting liquidity and banks’ portfolios, causing economic shifts that are impacting risk-on assets like Bitcoin.
As of Wednesday, Bitcoin was trading at $27,483, marking a slight 0.2% increase over the last 24 hours.
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