Hedge Funds Could Trigger Massive Bitcoin Decline, Says Arthur Hayes

Arthur Hayes, the co-founder of BitMEX, believes that Bitcoin's near-term price movement hinges on developments in U.S. politics.

In a recent post, he suggested that now is a time for patience, anticipating a potential pullback.

According to Hayes, if former President Donald Trump struggles to pass a budget that expands spending and raises the debt ceiling, Bitcoin could slide back to the $70,000–$75,000 range.

He views this as a test of Trump’s influence within the Republican Party.

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He also pointed out that many hedge funds holding BlackRock’s iShares Bitcoin ETF (IBIT) could soon start selling if Bitcoin’s price declines further.

These funds, he explained, have been using a strategy that involves going long on the ETF while shorting Bitcoin futures on the CME to capture a better yield than short-term U.S. Treasury rates.

If the spread between these positions narrows as Bitcoin drops, funds could liquidate their IBIT holdings and buy back futures, locking in profits. Hayes expects this unwinding to take place during U.S. trading hours, suggesting Bitcoin could soon test the $70,000 level.

Alexander Stefanov

With over 8 years of experience in the cryptocurrency and blockchain industry, Alexander is a seasoned content creator and market analyst dedicated to making digital assets more accessible and understandable. He specializes in breaking down complex crypto trends, analyzing market movements, and producing insightful content aimed at educating both newcomers and seasoned investors. Alexander has built a reputation for delivering timely and accurate analysis, while keeping a close eye on regulatory developments, emerging technologies, and macroeconomic trends that shape the future of digital finance. His work is rooted in a passion for innovation and a firm belief that widespread education is key to accelerating global crypto adoption.