As Bitcoin continues its decline, there is speculation that this downward trend might worsen. On the 24th, Arthur Hayes, co-founder of BitMEX, warned that “a Bitcoin bear market is on the horizon, with Bitcoin potentially dropping to $70,000.”
Hayes pointed to hedge fund activities as the foundation for his prediction. He noted that hedge funds investing in BlackRock’s Bitcoin spot ETFs often engage in a strategy of buying ETFs while short-selling Bitcoin futures in the futures market, allowing them to profit from the price differences.
However, Hayes cautioned that if the price gap between Bitcoin ETFs and futures contracts narrows, these hedge funds might sell their ETF holdings and repurchase futures. Such profit-taking and position liquidation could drive Bitcoin’s price down to $70,000.
