According to Arthur Hayes, founder of BitMEX, the Federal Reserve is getting ready to turn on the money printers again, and this could have a big impact on Bitcoin. Hayes believes that upcoming interest rate cuts from the U.S. central bank could push Bitcoin prices higher, even if other markets react differently.
Fed Hints at Policy Changes
During a recent speech at the Jackson Hole Symposium, Federal Reserve Chairman Jerome Powell stated that the “time has come” to shift policy. He’s talking about cutting interest rates, but the exact timing will depend on the latest economic data.
Hayes isn’t sure how these rate cuts will affect the stock market, but he’s confident they’ll boost Bitcoin. He explains on his Substack, “Some point to historical situations where the stock market fell as the Fed cut rates. Some fear that the Fed cutting rates is a leading indicator of a US and, by extension, developed market recession. That might be true, but if the Fed is cutting rates when inflation is above target and growth is strong, imagine what they will do if there actually is a US recession. They will ramp up the money printer and dramatically increase the money supply.”
Recession Fears and Rate Cuts
Many critics argue that rate cuts often precede a recession, causing concern whenever the Fed hints at lowering rates. Hayes agrees that these fears are understandable but warns against jumping to conclusions. Just because rate cuts and recessions often happen around the same time doesn’t mean one causes the other. As Hayes puts it, it’s like blaming firefighters for starting fires just because they’re always there when one occurs. it will not just be the Fed that will implement rate cuts, but the Bank of England and the European Central Bank might also go along with the measures. Hayes says:
“Central banks globally, now led by the Fed, are reducing the price of money. The Fed is cutting rates while inflation is above their target, and the US economy continues to grow. The BOE and ECB will likely continue cutting rates at their upcoming meetings.”
There’s still hope that the economy can avoid a recession. If the Fed manages to lower inflation to its 2% goal without triggering a downturn, it would be a win for everyone, including Bitcoin investors.
What’s Next for Bitcoin?
Hayes believes that Bitcoin could greatly benefit from lower interest rates, especially in an environment where inflation remains above target and growth is steady. If the Fed starts cutting rates under those conditions, it is certainly bullish and could set the stage for another Bitcoin rally.
The coming weeks are crucial, and the markets are watching closely to see how the Fed responds. For Bitcoin, a shift toward easier monetary policy could be just what it needs to climb higher. While there’s still uncertainty, there’s also room for optimism if the Fed’s actions favor Bitcoin’s growth.
We’re in a waiting game, but Hayes’s outlook offers a hopeful scenario for Bitcoin enthusiasts. If the Fed cuts rates as expected, we could see Bitcoin move up to new highs in the next month. Follow us at HowToBuyBitcoin.org to see how this story evolves. At time of writing Bitcoin is trading at $58,769, a little down over the last 24 hours.