In his new essay “Bullrun… Delayed”, Arthur Hayes, co-founder and former CEO of exchange BitMEX, analyses the current situation in the cryptocurrency market, focusing on why growth (bullrun) expectations may not be met anytime soon. Here’s a brief recap of the essay’s main ideas:
Economic and geopolitical factors:
- Hayes examines the impact of global macroeconomic instability and geopolitical events on the cryptocurrency market. In particular, central banks’ tightening monetary policies (raising interest rates and fighting inflation) are reducing interest in risk assets, including cryptocurrencies.
Therole of fiat currencies:
- He points out that continued confidence in fiat currencies (e.g. the US dollar) is slowing investors’ move into cryptocurrencies, as there are no strong incentives to move out of traditional assets into digital assets.
Current situation in the cryptocurrency market:
- According to Hayes, the recent stagnation in the cryptocurrency market may continue as the main drivers of growth (new innovations or significant institutional participation) have yet to fully manifest themselves. He also notes that many investors are waiting for the onset of a clear bullish phase, but its onset may be delayed.
Optimism for the future:
- Despite the delayed bullrun, Hayes remains optimistic about the long-term outlook. He predicts that cryptocurrencies will continue to gain popularity, especially against the backdrop of possible future economic turmoil and weakening fiat currencies.
The main message of the essay is that growth in the cryptocurrency market is expected, but it may come later than many participants have predicted.