Former BitMEX CEO Arthur Hayes has made a bold prediction that Bitcoin (BTC) likely found its local bottom at $77,000 during the March 10 dip. This assessment comes as the Federal Reserve signals a major shift in monetary policy that could fuel crypto markets.
In a significant development that aligns with recent market movements following the Fed’s policy shift, Hayes pointed to the end of quantitative tightening (QT) as a key catalyst for Bitcoin’s next move higher.
Fed Policy Shift Signals Potential Bitcoin Catalyst
The Federal Reserve announced yesterday that it will begin slowing its balance sheet reduction starting April 1, effectively marking the end of the QT era that began in June 2022. This monetary policy shift could have significant implications for risk assets like Bitcoin.
“JAYPOW delivered, QT basically over Apr 1. The next thing we need to get bulled up for realz is either SLR exemption and or a restart of QE,” Hayes stated on X (formerly Twitter).
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Market Experts Weigh In On Bottom Formation
Supporting Hayes’ analysis, Axie Infinity co-founder Jeff Jirlin noted that the end of QT would benefit both crypto and equity markets, describing current monetary conditions as the tightest since 2010.
However, some analysts remain cautious. As global market fears mount with gold reaching new highs, Bitcoin recently broke below a crucial 12-year support line against gold, suggesting potential economic uncertainty ahead.
Key Factors to Watch
- Federal Reserve’s transition away from QT
- Potential implementation of SLR exemption
- Possibility of QE restart
- Bitcoin’s price action around the $77,000 support level
Frequently Asked Questions
What is Quantitative Tightening (QT)?
QT is a monetary policy tool where central banks reduce their balance sheets by selling assets or letting them mature without reinvestment, effectively reducing money supply in the economy.
How does the end of QT affect Bitcoin?
The end of QT typically leads to increased liquidity in financial markets, which historically benefits risk assets like Bitcoin and could support higher prices.
What is the SLR exemption?
The Supplementary Leverage Ratio (SLR) exemption allows banks to exclude certain assets from their leverage calculations, potentially increasing their ability to provide market liquidity.
At press time, Bitcoin trades at $85,203, showing a 2% increase over the past 24 hours as markets digest the implications of the Fed’s policy shift.