Arthur Hayes: Bitcoin volatility will continue, weakness is temporary.

An important development for cryptocurrency investors is the recent comments from former BitMEX CEO Arthur Hayes. Hayes noted that the current weakness in Bitcoin (BTC) prices is influenced by the U.S. government's shutdown process, as well as dollar liquidity tightness. This situation, which has raised increasing concerns among investors, indicates that significant volatility will be experienced in the crypto markets.

Hayes emphasized that the U.S. Treasury continues to borrow and pull money out, but this money is not flowing into the markets. He reminded that the U.S. Treasury Account (TGA) target of $850 billion is approximately $150 billion above, highlighting that this extra held money will not enter the market until the government reopens.

Hayes argued that due to the government's high borrowing pace, the Federal Reserve (Fed) will have to print money again. He noted that this process will develop as stealth quantitative easing (stealth QE), foreseeing that the Fed will effectively increase the circulating dollar amount by providing unlimited liquidity to the repo market without directly purchasing bonds. Hayes stated, "If Standing Repo Facility (SRF) balances are above zero, it means the Fed is effectively printing money."

Hayes expresses an expectation of a volatile and weak market in the short term due to the government shutdown and cash tightness in the repo markets. However, he emphasized that this situation is temporary, noting that Bitcoin is approaching the four-year milestone from its 2021 peak. He pointed out that if many investors act hastily and sell during this process, they will incur losses.

Hayes predicts that if dollar liquidity in the markets begins to expand again, Bitcoin and altcoins will enter into a strong rally. Finally, he advises investors to be patient, stating, "This period presents an opportunity for patient investors. The market language may seem complex, but at its core, the matter is simple: either money is printed or it is destroyed. Whenever money printing begins, Bitcoin will start to dance again," giving hope to investors.