Bitcoin May Have Bottomed at $77,000 as Fed Ends Quantitative Tightening

Crypto entrepreneur Arthur Hayes recently shared his perspective on the state of Bitcoin (BTC), suggesting that the cryptocurrency likely hit its bottom at $77,000 during the plunge on March 10. Hayes, known for his insights into the crypto market, based his assessment on the latest remarks from the US Federal Reserve (Fed) signaling the end of quantitative tightening (QT).

Hayes highlighted that the Fed's decision to slow the pace of its balance sheet drawdown from April 1 is a significant shift in monetary policy. This change is expected to benefit risk-on assets like BTC and stocks, as it reduces the pressure on the money supply and potentially lowers interest rates. Hayes noted that the next potential bullish catalysts could be either a Supplementary Leverage Ratio (SLR) exemption or the start of quantitative easing (QE).

The SLR exemption, which temporarily allows banks to exclude certain assets from their leverage calculations, and QE, which involves increasing the money supply, are both policies that could support financial markets and encourage lending. Hayes cautioned, however, that while BTC may have bottomed, stock markets could still face more pain ahead. He advised market participants to stay nimble and cash-rich to navigate the potential volatility.

Jeff Jirlin, co-founder of Axie Infinity, echoed Hayes' sentiments, stating that the end of QT from April onwards would be beneficial for both crypto and equity markets. Jirlin noted that the current monetary policy is the tightest he has observed since 2010, indicating a significant shift in the economic landscape.

Despite the optimism surrounding the Fed's recent comments, the premier cryptocurrency is not fully out of the woods yet. BTC recently broke down through a 12-year trend line against gold, raising concerns about heightened economic uncertainty in the near term. Additionally, CryptoQuant CEO Ki Young Ju recently expressed skepticism about the Bitcoin bull run, suggesting that it may be over. At the time of reporting, BTC was trading at $85,203, up 2% in the past 24 hours.

In summary, Arthur Hayes' analysis suggests that Bitcoin may have hit its bottom at $77,000, driven by the Fed's shift in monetary policy. While this is a positive sign for the crypto market, there are still uncertainties and potential challenges ahead. Market participants are advised to remain cautious and prepared for potential volatility in the coming months.