{"id":16638,"date":"2024-09-03T12:55:51","date_gmt":"2024-09-03T09:55:51","guid":{"rendered":"https:\/\/forklog.com\/en\/arthur-hayes-attributes-bitcoins-decline-to-liquidity-shortage\/"},"modified":"2024-09-03T12:55:51","modified_gmt":"2024-09-03T09:55:51","slug":"arthur-hayes-attributes-bitcoins-decline-to-liquidity-shortage","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/arthur-hayes-attributes-bitcoins-decline-to-liquidity-shortage\/","title":{"rendered":"Arthur Hayes Attributes Bitcoin&#8217;s Decline to Liquidity Shortage"},"content":{"rendered":"<p>The spread between <a href=\"https:\/\/ru.wikipedia.org\/wiki\/%D0%A1%D0%B4%D0%B5%D0%BB%D0%BA%D0%B0_%D0%A0%D0%95%D0%9F%D0%9E\">reverse repo operations<\/a> <span data-descr=\"overnight\" class=\"old_tooltip\">o\/n<\/span> and the yield on four-week US Treasury bills at ~0.9% limits the liquidity available for purchasing risk assets like Bitcoin, according to former BitMEX CEO Arthur Hayes.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">My theory on why Fed rate cuts aren&#8217;t going to plan.<\/p>\n<p>Since JAYPOW annc Sept rate cut at J-Hole, <a href=\"https:\/\/twitter.com\/search?q=%24BTC&#038;src=ctag&#038;ref_src=twsrc%5Etfw\">$BTC<\/a> down 10%, y? I thot rate cuts were good for risk assets.<\/p>\n<p>RRP pays 5.3% no T-bill under 1-yr maturity pays more. MMF will move money from T-bill -> RRP which is $ liq -ve.<\/p>\n<p>Since\u2026<\/p>\n<p>\u2014 Arthur Hayes (@CryptoHayes) <a href=\"https:\/\/twitter.com\/CryptoHayes\/status\/1830554303817273823?ref_src=twsrc%5Etfw\">September 2, 2024<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The expert noted that since Federal Reserve Chairman Jerome Powell <a href=\"https:\/\/u1f987.com\/en\/news\/bitcoins-reaction-to-powells-speech-and-growth-signals\">announced<\/a> a monetary policy easing in September, Bitcoin has lost 10% of its value.<\/p>\n<p>Hayes attributed the negative trend to money market funds potentially shifting capital from short-term US Treasury bills (4.38%) to reverse repo operations with the Federal Reserve (5.3%), providing a risk-free yield of 0.92%.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/1-1189.webp\" alt=\"1-1189\" class=\"wp-image-240304\"\/><figcaption class=\"wp-element-caption\">Data: <a href=\"https:\/\/fred.stlouisfed.org\/\"><span data-descr=\"Federal Reserve Bank\" class=\"old_tooltip\">FRB<\/span> of St. Louis<\/a>.<\/figcaption><\/figure>\n<p>Following Powell&#8217;s speech, the volume of the latter increased by $120 billion. According to the former BitMEX CEO, this situation will persist as long as <span data-descr=\"US Treasury bills\" class=\"old_tooltip\">T-Bill<\/span> rates remain lower than those for <span data-descr=\"reverse repo operations\" class=\"old_tooltip\">RRP<\/span>.  <\/p>\n<p>According to futures, the probability of a 25 basis point rate cut by the <span data-descr=\"Federal Reserve System\" class=\"old_tooltip\">Fed<\/span> at the September 18 meeting is 69%, and 31% for a 50 basis point cut.<\/p>\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html?redirect=\/trading\/interest-rates\/countdown-to-fomc.html\"><img decoding=\"async\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/2-882.webp\" alt=\"2-882\" class=\"wp-image-240305\"\/><\/a><figcaption class=\"wp-element-caption\">Data: <a href=\"https:\/\/www.cmegroup.com\/markets\/interest-rates\/cme-fedwatch-tool.html?redirect=\/trading\/interest-rates\/countdown-to-fomc.html\">CME Fedwatch<\/a>.<\/figcaption><\/figure>\n<p>On the Polymarket prediction platform, these odds are <a href=\"https:\/\/polymarket.com\/event\/fed-interest-rates-september-2024?tid=1725354710279\">estimated<\/a> at 77% and 20%, respectively. The volume of bets reached $10.9 million.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/u1f987.com\/wp-content\/uploads\/3-500.webp\" alt=\"3-500\" class=\"wp-image-240306\"\/><figcaption class=\"wp-element-caption\">Data: Polymarket.<\/figcaption><\/figure>\n<p>Between August 25 and 31, clients withdrew $305 million from crypto funds. CoinShares analysts attributed the negative trend to US macroeconomic data, which reduced the likelihood of a 50 basis point Fed rate cut.  <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The spread between reverse repo operations o\/n and the yield on four-week US Treasury bills at ~0.9% limits the liquidity available for purchasing risk assets like Bitcoin, according to former BitMEX CEO Arthur Hayes. My theory on why Fed rate cuts aren&#8217;t going to plan. Since JAYPOW annc Sept rate cut at J-Hole, $BTC down [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":16637,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1193,1249,1224,1145],"class_list":["post-16638","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-arthur-hayes","tag-federal-reserve-system","tag-macroeconomics","tag-market-analysis"],"aioseo_notices":[],"amp_enabled":true,"views":"13","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/16638","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=16638"}],"version-history":[{"count":0,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/16638\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/16637"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=16638"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=16638"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=16638"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}