Arthur Hayes, chief executive officer of the Bitcoin and crypto derivatives exchange BitMEX, predicts Bitcoin’s volume is about to fall off a cliff.
According to Hayes, Chinese New Year celebrations, which begin on Saturday, will trigger a major drop in crypto trading volume.
新年快乐 The year of the rat starts this weekend. Time for #Bitcoin volatility and volumes to nose dive.
— Arthur Hayes (@CryptoHayes) January 23, 2020
Although Chinese regulators banned trading on local cryptocurrency exchanges in 2017, the country still plays a significant role in the crypto markets. Outside exchanges such as Huobi and OKEx are still serving local customers, allowing Chinese traders to arrange deals over-the-counter.
In contrast, crypto analyst and economist Alex Krüger says he expects the impact of the New Year to be minimal, offering an historical look at Bitcoin’s price action in the aftermath of the Chinese holiday.
New Year celebrations aside, a market analyst at the foreign exchange company Oanda tells Bloomberg that BTC is now facing headwinds after a strong start to the year, while China copes with Wuhan, the epicenter of a viral outbreak that has triggered an unprecedented lockdown on at least three cities across the country.
“Bitcoin and the entire crypto space are under pressure as uncertainty over regulatory scrutiny is expected to intensify and investor skepticism grows for the short-term outlook for risky assets.
[Investors] saw central banks unite and begin a review on digital currencies, fading optimism that a Bitcoin ETF will occur, and amid the China coronavirus worries, a flight-to-safety to the bond markets and not cryptocurrencies.”
Bitcoin has struggled over the last week. After reaching a high of $9,153 on Saturday, the leading cryptocurrency has dropped to $8,436 at time of publishing, according to CoinMarketCap.