Crypto veteran and BitMEX founder Arthur Hayes updates his outlook on when altcoins might have their moment.
In a new essay, Hayes says he expects the cryptocurrency market to react positively to a massive injection of liquidity into the financial system planned by US Treasury Secretary Janet Yellen and the issuance of US Treasury bills (T-bills).
Hayes says the new liquidity could cause Bitcoin (BTC) and Ethereum (ETH) to surge, while setting the stage for an “altseason.”
“So, if we believe bad girl Yellen, we know that $301 billion in Treasuries will be net issued by the end of the year. If this relationship holds, Bitcoin will quickly retrace the fall caused by the strengthening yen. The next stop for Bitcoin is $100,000.”
Hayes believes the altseason could take off within a few months if certain market conditions are met.
“Sh*tcoins are higher beta cryptocurrencies Bitcoin. But during this cycle, Bitcoin and now Ether have structural bids in the form of net inflows into US-listed exchange-traded funds (ETFs). While Bitcoin and Ether have corrected since April, they have escaped the carnage suffered by shitcoin markets. Altcoin season will only return after Bitcoin and Ether have firmly broken through $70,000 and $4,000, respectively. Solana will also climb above $250, but the crypto market-wide wealth effect of a Solana pump is nowhere near as powerful as with Bitcoin and Ether, given the relative market caps.
The combination of a Bitcoin and Ether rally inspired by dollar liquidity at the end of the year will create a solid foundation for the return of a sexy shitcoin party.
At the time of writing, Bitcoin is trading at $59,964, up slightly over the past 24 hours. Meanwhile, Ethereum is trading at $2,673 at the time of writing, flat on the day.
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Featured image: Shutterstock/Tithi Luadthong
