According to former CEO of BitMex, Arthur Hayes, there is a possibility that the worst of the current crypto bear market is behind us. He thinks this because, according to him, all entities that could go bankrupt have already gone bankrupt. He mainly refers to FTX and Terra (LUNA).
Let’s try this again.
In “PEMDAS” I argue that $BTC has bottomed, and then talk about which type of #crypto‘s I will hold while waiting for the money printer to go brrr once more.https://t.co/JNAQ7VK0Ec pic.twitter.com/IV4Td1UTda
—Arthur Hayes (@CryptoHayes) December 9, 2022
Bankrupt platforms aggressively sold bitcoin
Hayes explains that these irresponsible parties sold their bitcoin (BTC) reserves in the run-up to their bankruptcies. This aggressive selling of large amounts of bitcoin has pushed the current price down. He does not expect such a situation where a large entity is once again forced to sell all of its bitcoin reserves.
“If you look at the balance sheet of these entities, there is no bitcoin. While they went bankrupt they sold the bitcoin. They did this during the wave just before the bankruptcy.”
Hayes explained this phenomenon in a December 9 blog entry. He says that platforms sell their bitcoin to avoid bankruptcy in vain. Loans are also being liquidated, which resulted in large sales of bitcoin.
Will crypto make a turnaround in 2023?
Hayes cannot say with certainty that all bitcoin, which FTX owned, for example, have actually been sold. But he says the chances are high.
“I cannot prove that all of the bitcoin from these failed institutions was actually sold during the multiple crashes. But it seems they did their best to sell their underlying assets as quickly as possible before they went bankrupt.”
So he thinks the worst of the current bear market is behind us. Looking ahead, he thinks that 2023 may already offer a cautious rise in prices.
“I expect that sometime in 2023 the US treasury market will stop functioning due to the monetary policy of the Federal Reserve. At that point I think the printer will turn on. Then bitcoin and other assets will rise.”