Overview
- Crypto legend makes bold price prediction
- Markets fall into prior range
- Solana down again!?
- Tether survives a mini bank run
Bold predictions in âShut it Down!â By Arthur Hayes.
Iâve become accustomed to reading what seems like a bi-weekly letter from Arthur Hayes, the Bitmex founder and gigabrained fugitive currently kicking it in Hong Kong. Thereâs no doubt about it, heâs not just one of the finest writers in crypto, but also among the brightest minds in the space.
Below, Iâve summarized Hayeâs most recent informative novel (his articles arenât known for being⊠concise), into a bite-sized, easy-to-digest alpha nugget.Â
Intro
Hayes compares the FEDâs rate increases to an old trading floor companionâs (nicknamed âKillahâ) attempt to eat ten Big Macs in two hours.
The real question:
- He states the bull market can only begin once central banks reverse course, which requires pausing rate hike and keeping balance sheets constant.
- The ruling Democratic party will need to take action to correct course before November elections.
- The world is in a pseudo-World War; an economic war against Russia. Ukraine and Russia account for a large amount of the worldâs food. Cutting rates wonât help rising food costs and shortages. The US government can offer fuel and food subsidies in turn accelerating inflation and famine. Hayes notes this could happen by the third quarter.
- The market will enter the mother of all ârisky-asset bubble” bull markets, with the possibility of a generation market collapse a few years later due to the largest amount of money printing in human history.
Bottom Fishing (Market Bottom)
- Hayes explains a possible reason for the inevitable Terra collapse. Basically, Terra was doomed from the start. The fact Terra sold 80,000 bitcoins without sinking the ship highlight the strength of the crypto market.
- The recent sell-off decoupled crypto from the broader risky asset universe.
- Predicts the bitcoin (BTC) bottom at $27,000 and Ethereum (ETH) bottom at $1,800.
- Clickbait articles from Bloomberg, FT, WSJ all support we are near the bottom.
- Hayeâs bottom checklist:
- Bitcoin/Ether move increasingly in a less correlated fashion vs. the Nasdaq 100.
- The current price levels are very close to the previous cycleâs all-time highs.
- The mainstream financial media gloats about how stupid and greedy plbs were who attained short-lived wealth investing in crypto.
Choppa Fellas and Accumulation
- There will be choppy price action ahead, that will strongly affect short-term traders.
- âThe boomers will rage against the machine and set us free from the cage of tight central bank liquidity.â
- âIt is better to wait for the all-clear signal from the high clergy of the devil that it is time to join the crusade.â – in reference to the Fed stopping quantitative tightening.
Market update đ
Like a prairie dog on a lookout, bitcoin (BTC) retreated into its hideout after breaking strong resistance earlier this week. The RSI indicator continues to climb creating a hidden bullish divergence on the daily chart. Once again, BTC will encounter the 28.6k support or the 30.8k resistance before it can make any major moves. BTC fell -6.27% to US$29,800.
Source: Trading View
The US Dollar (DXY) continues its climb after nearly two week of sliding. The upward trend is a line the cryptoverse would like to see breakdown, as it would signal a move away from dollars into speculative assets.
Source: Trading View
| US markets close | Gain |
| S&P 500 | -0.75% |
| Nasdaq | -1.93% |
| Dow | +0.19% |
| VIX | -1.91% |
Notable Gainers (24h):
| Protocol (Coin) | Price ($) | Gain (%) |
| Chain (XCN) | 0.18 | +5 |
| Evmos (EVMOS) | 3.29 | +4.6 |
| Evmos (EVMOS) | 1.85 | +20 |
| Wax (WAXP) | 0.15 | +20 |
| NuCypher (NU) | 0.29 | +16 |
| Wrapped Centrifuge (WCFG) | 0.42 | +54 |
| Ark (ARK) | 0.65 | +18 |
| Status (SNT) | 0.04 | +9 |
| Bitcoin Fear and Greed Index | 13 Extreme Fear |
| âCryptoâ Google Trends 90d | 23 |
| âBitcoinâ Google Trends 90d | 34 |
Newswatch đ°
Solana goes down, again. The Solana (SOL) blockchain focused on speed was down for nearly four hours yesterday. The blockchain ceased to create new blocks and the Solana Status team said the mainet needed a restart from validators. The high-performance blockchain has experienced several issues in the past related to congestion.
FTX overtakes Coinbase. The competition for second largest centralized exchanges in market shares has heats up after FTX overtook Coinbase in May. Binance continue to lead the market with 64.1% of total share while FTX moves into second with 10.8%. Coinbase controls 9.6%.
News tidbits:
- Chipotle begins accepting crypto payments through Flexa app.
- Meta COO, Sheryl Sandbery steps down from Meta after 14 years.
- Binance Labs raises $500 million investment fund for web3 projects.
- Coinbase will be adding support for Kusama (KSM)
At the protocol level.
USDT passes the stress test. In the self-published Stress Tests, Resiliency and Bank Runs, Tether showcases the resiliency of its stablecoin network. The firm redeemed $10b, 12% of USDT token, in a single week âwith ease.â Tether highlights that no bank in the world could process the withdrawal of 12% of its outstanding liabilities within a week. The withdrawal rivals the largest bank run in history, where $16.7b was withdrawn from Washington Mutual in 10 days, except Tether didnât collapse like WM.
NFT & metaverse update đ”
Former Opensea insider indicted. Nathaniel Chastain, a former head of product for Opensea, was arrested on Wednesday morning after being indicted with laundering, wire fraud and insider trading charges. Chastain was previously accused of insider trading after buying NFTs that would later be listed on Openseaâs front page.
Immutable proposes Otherside metaverse joins the layer-2 network. Immutable (IMX) the NFT centered layer-2 has submitted a proposal which offers the Otherside metaverse to be built on the Immutable X chain. The proposal, submitted on the ApeCoin DAO on May 27, will now enter Immutable in competition with Avalanche (AVAX) over who wins the bid.
NFT tidbits:
- Kanye Westâs Yeezus files for 17 NFT trademarks
Banterâs take
The markets were doused in red today, again. We ainât out of the woods just yet. According to Arthur Hayes, it will likely be a bumpy road ahead that will wipe accounts of shaky-handed traders. His advice, think long-term.
Just like Raul Paoul mentioned on Ranâs show, Hayes thinks the Fed will have to start subsidizing (one way or another) later this year. The tightening will be hard to maintain in current conditions especially with the possibility of food shortages.
So if you believe thereâs some truth behind these marco expersâ words, things are going to get shaky before the Fed can steer the ship to the calmer seas of quantitative easing.
Thanks for reading!
Gabri
