BitMEX co-founder Arthur Hayes thinks impending rate cuts in the US will drive up the price of Bitcoin (BTC).
In a new blog post, Hayes said comments made by Federal Reserve Chair Jerome Powell last week indicate the Fed is “reaching for the rate cut sugar high before hunger arrives.”
While speaking in Jackson Hole, Wyoming, Powell said the time has come for “policy to adjust,” noting that incoming data would determine the pace of rate cuts.
Hayes says he doesn’t know if the rate cuts will benefit stock prices, but he’s confident about the policy change’s impact on Bitcoin.
“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. That leads to inflation, which could be bad for certain types of businesses. But for assets in finite supply like Bitcoin, it will provide a trip at lightspeed 2 Da Moon!”
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