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Arthur Hayes sees Bitcoin surge with central bank rate cuts

Arthur Hayes sees Bitcoin surge with central bank rate cuts

GrafaGrafa2024/09/02 00:05
By:Liezl Gambe

Arthur Hayes, co-founder of the crypto exchange BitMEX, has shared a bullish outlook on Bitcoin (CRYPTO:BTC), attributing his optimism to recent central bank decisions to cut interest rates.

Hayes highlights recent rate reductions by the U.S. Federal Reserve, the Bank of England, and the European Central Bank as indicators that more substantial rate cuts might be forthcoming.

He suggests these actions are likely to increase the money supply and drive inflation higher.

In his recent commentary, Hayes argues that although rising inflation could challenge various sectors, Bitcoin could benefit significantly.

Bitcoin’s fixed supply and deflationary nature position it advantageously in an environment of increasing money supply.

Hayes emphasises that central banks cutting rates amidst persistent inflation might lead to more aggressive monetary policies, potentially resulting in a substantial rise in Bitcoin’s value.

He believes that if central banks continue to lower interest rates while economic growth remains strong and inflation stays high, further monetary easing is likely, particularly if a recession occurs.

This scenario could drive inflation higher, which might negatively impact traditional businesses but benefit assets with limited supply, such as Bitcoin.

Hayes’s perspective reflects his belief that Bitcoin is well-positioned to thrive in an inflationary environment.

He suggests that as central banks increase money printing and expand the money supply, Bitcoin’s status as a deflationary asset with a capped supply could lead to significant gains.

According to Hayes, Bitcoin could experience rapid appreciation as central banks' policies continue to shape the broader economic landscape.

At the time of writing, the Bitcoin price was $57,353.11.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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