The bitcoin price slipped below $7K yesterday after failing to surmount the $7,500 level for the fifth time since the crash on March 12 and 13. The unprecedented correction in the crypto markets at that time saw bitcoin plummet to $3,700 in hours. Peculiarly, this came as the traditional stock markets also experienced an equal and painful drop.
In the near-term, BitMEX CEO Arthur Hayes expects the top cryptocurrency to revisit the $3K level as global markets “puke again”.
The Next Leg Down: Hayes Expects Bitcoin To Drop To $3K
In the face of the coronavirus outbreak, governments are unveiling several stimulus packages to cushion the slowly weakening global economy. The United States, in particular, has launched trillion-dollar bailouts which even include checks to citizens.
In a recent blog post, Arthur Hayes notes that all these solutions will eventually favor bitcoin in the long-run as it is “the hardest form of digital money”.
The United States dollar, on the other hand, will face an inevitable collapse due to the unending money printing. Hayes reiterates the widely-known fact that as the US prints a lot of money in an effort to monetize the government’s debt, the dollar will collapse and inflation will be prevalent.
At the moment, the number of coronavirus-related deaths worldwide has surpassed 100,000 and there is no hope of a plateau in the United States or Europe. Moreover, more than 16 million American citizens have lost their jobs in the last 3 weeks.
As investors grapple with these unnerving facts, the financial markets are likely to tumble again. During the next leg down in the global markets, Hayes believes bitcoin will revisit March’s levels.
He basically stated:
“Could the price retest $3,000? Absolutely. As the SPX rolls over and tests 2,000 expect all asset classes to puke again. As violent as the Q1 collapse in asset values was, we have almost 100 years of imbalances to unwind the ancien regime.”
Bitcoin is currently valued at $6,870.62 after shedding 0.60% on the day.
Nonetheless, Arthur Stands By His $20,000 Year-End Target
With the USD on the verge of collapse, Hayes believes a new system will be birthed. He posits that there are only two things that everyone should own as the world transitions to this new system: gold and bitcoin.
And although he still expects bitcoin to soon retest $3k, the crypto-asset will recover and surge to $20k highs by the end of this year. The CEO concludes by saying:
“If you think I’m full of shit, or a stark-raving Cassandra, remember what you believed in pre and post-COVID. Can your mental model revert back to January 2020? I will take my inflation-adjusted pocket rockets (gold and bitcoin), and call your Bretton Woods seven two off suit. All in, mother fuckers.”
Worth noting that Arther Hayes is not the only crypto stalwart expecting bitcoin to reach $20,000 by the end of 2020. ZyCrypto reported about Mike Novogratz who proclaimed that he may give up on BTC if it doesn’t hit $20,000 by the end of this year.