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Former BitMEX CEO says the “irresponsible entities” within the crypto industry have all been completely wiped out.
Former BitMEX CEO Arthur Hayes believes that Bitcoin (BTC) may have just survived the current bear cycle. According to him, the “irresponsible entities” that needed to be flushed out have all been flushed out. Therefore, he believes that things can only get better for BTC from this point onwards.
Hayes, who spoke at a recent interview with popular podcaster Scott Melker, also opined that the so-called irresponsible entities have all run out of BTC to sell. He said:
“Looking forward, pretty much everyone who could go bankrupt has gone bankrupt.”
Arthur Hayes Cites Reason for His Stance on Bitcoin
Shedding more light on his stance, Hayes explains that it is common for centralized lending firms (CELs) to first request loans, particularly in times of financial trouble. After that, they often opt to sell their BTC which usually serves as their go-to “reserve asset.” According to the crypto enthusiast, this is why a look at the balance sheets of any of these bankrupt firms will show that there’s no Bitcoin therein. The reason, he says is that they must have sold off their Bitcoin in the process of going bankrupt.
Recall that in an earlier blog post, Hayes also voiced a similar argument. In the post, he said BTC was being traded in large amounts. This was even as CELs tried to avoid bankruptcy and trading firms in debt struggled to liquidate their positions.
Meanwhile, Hayes also admits that he has no evidence that this is exactly what happened with the failed companies. Nonetheless, he believes it was the only reasonable thing for them to do, given the circumstances. He said:
“There is no reason why you would hold on if you had an urgent need for fiat.”
Excited for 2023
Without a doubt, the recent collapse of the crypto exchange FTX saw matters go from bad to worse for the crypto market. However, Hayes believes that 2023 could usher in some recovery for the market. He believes that with the Fed continuously tightening monetary policy, it is only a matter of time before the US Treasury market will become dysfunctional. And in the event that that happens, Hayes believes that the Fed will be left with no option but to turn the printer bank on, at which point, Bitcoin and all other risk assets will surge.