- Hayes urged aggressive investment amidst market decline.
- Hayes saw Bitcoin as a hedge amid negative real yields, despite skepticism.
Well, the most argued topic in and around the cryptocurrency space has been — Is Bitcoin [BTC] a hedge against fiat currency devaluation?
While the Bitcoin halving has been the talk of the town for quite some time, Arthur Hayes, the former CEO of crypto exchange BitMEX, offered insights into a strengthening trend that could drive BTC’s continued rise.
Arthur Hayes’s left curve approach
In his recent essay titled- ‘Left Curve’, Hayes not only shared strategies for investment but also criticized traditional financial wisdom, urging investors to adopt more aggressive strategies to maximize returns.
He said,
“Bull markets don’t come often; it is a travesty when you make the right call but do not maximize your profit potential.”
Additionally, emphasizing the importance of maximizing profits during bull markets, and criticizing selling crypto for fiat currency, Hayes said,
“If you sold sh*tcoins for fiat that you don’t immediately need for living expenses, you are f**king up.”
Also, shedding light on the investor’s behavior, Kaiko noted,
“Funding rates for $BTC perps turned negative for the first time since late 2023 in the lead up to the halving.”
Source: Kaiko/ Twitter
This suggested that there was more selling pressure in the market, and traders were willing to pay a premium to borrow BTC for short positions.
Bitcoin stands the test of time
Hayes also analyzed the relationship between real bond yields and the Federal Reserve’s balance sheet, and how economic shocks affect yields.
Source: Arthur Hayes/ Medium
He suggested,
“Bitcoin is rising in a non-linear fashion on a log chart. Bitcoin’s rise is purely a function of an asset with a finite quantity being priced in depreciating fiat dollars.”
This highlighted that BTC has emerged as an alternative investment during periods of negative real yields, offering a hedge against fiat currency depreciation.
However, being skeptical of Bitcoin’s investment optimism, Peter Brandt, CEO of Factor LLC, factored,
“It is extremely interesting to note that Bitcoin $BTC price (adjusted for inflation) has not made a new high in three years despite halving and Bitcoin ETFs.”
Despite such criticism, Hayes was still confident and suggested that as we move into the summer months, we should expect crypto volatility to decrease.
“This is the perfect time to take advantage of the recent crypto dip to slowly add to positions.”
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