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By Decrypt
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Recent policy moves from global central banks suggest that the time has come to ape into Bitcoin and high-conviction shitcoins, according to BitMEX co-founder Arthur Hayes.
Earlier this week, both the Bank of Canada and the European Central Bank became the first G7 countries to lower their benchmark interest rates, which neither region has done in several years. According to Hayes, those pivotal moves will “catapult crypto out of the northern hemispheric summer doldrums.”
“The trend is clear. Central banks at the margin are starting easing cycles,” the 39-year-old entrepreneur wrote in a Thursday post. “We know how to play this game… Go long Bitcoin and subsequently shitcoins.”
As for his personal portfolio, Hayes said he would be rotating out of Ethena’s synthetic dollar stablecoin USDe and back into “conviction shitcoins”–near-zero value tokens and meme coins—which he said he will name only after he’s done buying them.
“For the Maelstrom portfolio projects, who asked for my opinion on whether to launch their tokens now or later, I say, Let’s Fucking Go!” he added.
Historically speaking, both stocks and Bitcoin tend to perform well when central banks drive down borrowing costs. One example lies in Bitcoin’s climb from under $4000 to $64,000 between March 2020 and April 2021, right after the Federal Reserve lowered its benchmark interest rate to 0.25%.
Most analysts and market participants don’t believe the Fed will follow its global neighbors with an immediate rate cut at its June meeting, however, given that inflation is proving more persistent in the United States.
Still, Hayes argues that the U.S. central bank is under immense geopolitical pressure to devalue the dollar in order to provide relative strength to the Japanese Yen. As such, a rate cut will likely arrive soon–just not during election season while inflation is such a hot political topic.
By contrast, Hayes says the Bank of England will likely surprise the world with a rate cut on June 20, following orders from the United States to keep the yen strong.
“Suffice it to say, the crypto bull is reawakening and is about to gore the hides of profligate central bankers,” Hayes concluded.
Edited by Ryan Ozawa.
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