Arthur Hayes, a highly respected player in the crypto industry and the former leader of crypto exchange BitMEX, has issued a warning that all crypto assets except Bitcoin and Ethereum could suffer huge losses.
Hayes said in his report that if Bitcoin and Ethereum drop below $30K and $2K respectively in the coming months, he will consider selling all his other crypto assets, as their losses could be staggering.
“I’ll get rid of all my shItcoins if Bitcoin is expected to drop below $30K Ether is below $2,000 over the next three to six months. Bitcoin and Ether are among the best currencies available today, which means that they will fall less than the rest of their yet to be proven competitors.“
The gravitational pull will also be greater than 9.8 m/sec for any specific applications using the Bitcoin or Ether blockchain. If there is no risk from cryptocurrency, these digital currencies could drop 75% to 90%,” Hayes said.
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Additionally, Hayes says he may start taking a second look at the value of Bitcoin and Ethereum if they correct below their previous bull market highs.
He said, “If Bitcoin drops below $20K Or Ether drops below $1,400, I will wonder if these cryptocurrencies can survive in terms of energy costs.“
“At these two levels, the 2017 bull market reached all-time highs. Fiat Price Is What Matters, If Oil Goes Down Again Who Cares? If standard cryptocurrencies fetch fewer fiat units as a result?“
As of writing, the major cryptocurrency is trading at $42,000 on the FTX exchange, down 21% from a 30-day high of $50.8K while Ether is trading at $3,134, down 35% from a 30-day high at 4.1. dollar. K
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Additionally, Bitcoin could come under downward pressure if US inflation data is higher than expected on Wednesday.
Consumer prices are expected to rise 7.1% in the year to December and 0.4% month-on-month, according to the widely tracked Consumer Price Index (CPI). As a result of this rally, officials at the US Federal Reserve are pushing for faster monetary policy normalization than initially expected.
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Crypto assets are at the riskier end of the risk curve, and since they have benefited from the Federal Reserve’s “extremely loose monetary policy,” it is reasonable to expect that they will suffer when an “unexpectedly tougher” policy shifts funds to safer assets.
However, Mike McGlone, chief commodity strategist at Bloomberg Intelligence, said $4OK was an important support level in the bitcoin market. Moreover, I believe that when the world becomes digital and BTC is treated as collateral, the leading cryptocurrency will eventually come out of its bearish phase.