BitMEX Founder Sees Bitcoin Correction of Up to 40% in Early 2024

Arthur Hayes and Bitcoin logo

Arthur Hayes, the founder of cryptocurrency exchange BitMEX, said he expects Bitcoin to experience a healthy correction of 20% to 30% from its current level by early March, and possibly more if the US-listed spot Bitcoin ETFs start trading by then.

Arthur Hayes, the founder of cryptocurrency exchange BitMEX, said he expects Bitcoin to experience a healthy correction of 20% to 30% from its current level by early March, and possibly more if the US-listed spot Bitcoin ETFs start trading by then.

The Dollar Liquidity Rug Pull

In a blog post published on Jan. 5 titled Signposts, Hayes said that Bitcoin’s rally to a new all-time high of $70,000 in 2021 was driven by institutional demand and retail FOMO, but also warned that the market could face a liquidity crunch if the dollar strengthens and investors rush to exit their positions.

“Imagine if the anticipation of hundreds of billions of fiat flowing into these ETFs at a future date propels Bitcoin above $60,000 and close to its 2021 all-time high of $70,000,” Hayes wrote. “I could easily see a 30% to 40% correction due to a dollar liquidity rug pull.”

Be Prepared for Both Bullish and Bearish Scenarios

Hayes said that he is not bearish on Bitcoin in the long term, but rather cautious about the short-term volatility and uncertainty. He advised traders to be prepared for both bullish and bearish scenarios, and to use risk management tools such as stop losses and hedging strategies.

He also said that he is looking forward to the launch of the US-listed spot Bitcoin ETFs, which he believes will bring more legitimacy and transparency to the crypto market, as well as attract more institutional and retail investors.

A Game-Changer for the Industry

“The US-listed spot Bitcoin ETFs will be a game-changer for the industry,” Hayes wrote. “They will provide a regulated and liquid way for anyone to gain exposure to Bitcoin, without having to deal with the complexities and risks of custody, security, and regulation.”

According to CoinMarketCap, Bitcoin was trading at $43,858.02 as of 08:06 UTC on Jan. 6, up 2.22% in the past 24 hours. The cryptocurrency has gained 8.9% in the past week, but is still down 37.1% from its record high of $68,991 on Nov. 10, 2021.

Author: Jinka

Jinka is a self-trained crypto journalist, passionate about happenings in the industry.