BitMEX Co-Founder Predicts 40% Bitcoin Correction to $90,000

Arthur Hayes, the co-founder of BitMEX, has predicted a significant correction in the price of Bitcoin, forecasting a dip to around $90,000. This pullback is anticipated to precede a substantial rally that will drive the cryptocurrency to new heights. Hayes' analysis is grounded in the potential impact of bank-issued stablecoins, which he believes will inject trillions of dollars into the digital assets market.

Hayes' short-term outlook suggests that Bitcoin's price will experience a period of volatility before its next upward movement. He attributes this to historical market cycles and the tendency of speculators to take profits. This correction could be exacerbated by traders awaiting clearer policy signals from the U.S. Federal Reserve, leading to a "summer lull" where Bitcoin's price stabilizes around the $90,000 mark. This stabilization would create a stronger foundation for future growth by eliminating weaker investors and establishing a new support level.

Looking ahead, Hayes' long-term vision is driven by the anticipated introduction of fully regulated, bank-issued stablecoins from major financial institutions. These stablecoins are expected to serve as more than just competitors to existing digital assets like Tether (USDT); they will be essential tools for the banking industry. Hayes predicts that these new digital dollars will enable banks to transfer trillions of dollars from low-yield retail deposit accounts into short-term Treasury bills without incurring capital penalties. This influx of liquidity is expected to flow into risk assets, including Bitcoin and top tech stocks, fueling the next major bull market.

Hayes' prediction aligns with a classic market scenario of "one step back, two steps forward," where a necessary correction is followed by a powerful, liquidity-driven rally. This outlook suggests that while Bitcoin may face resistance and a pullback in the near term, the long-term prospects remain bullish, driven by the influx of capital from bank-issued stablecoins and the broader adoption of digital assets.