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

An important development for cryptocurrency investors is the recent comments made by former BitMEX CEO Arthur Hayes. Hayes noted that the current weakness of Bitcoin (BTC) prices is influenced by the U.S. government's shutdown process as well as the dollar liquidity crunch. This situation, which is causing increasing concern among investors, indicates that significant fluctuations will occur in the cryptocurrency markets.

Hayes pointed out that the U.S. Treasury continues to borrow and withdraw money, but this money is not flowing into the market. He reminded that the U.S. Treasury Account (TGA) is about 150 billion dollars above the target of 850 billion dollars, emphasizing 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 be forced to print more money. He stated that this process would manifest as stealth monetary easing (stealth QE), predicting that the Fed will increase the amount of dollars in circulation by providing unlimited liquidity to the repo market without directly purchasing bonds. Hayes remarked, "If Standing Repo Facility (SRF) balances are above zero, it effectively means the Fed is printing money."

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

Hayes predicts that if dollar liquidity in the markets begins to expand again, Bitcoin and altcoins will enter a strong rally. Finally, he advised investors to be patient, stating, "This period is an opportunity period for patient investors. The market language may seem complex, but the issue is simple: either money is printed or it is destroyed. Once money begins to be printed, Bitcoin will start dancing again," giving hope to investors.