### «Буллран… задерживается» — новое эссе Артура Хейса. Краткий пересказ
Arthur Hayes, the former CEO of cryptocurrency exchange BitMEX, has published a new essay titled “Boom Times… Delayed.” In this piece, Hayes revises his previous forecasts for high-risk assets and the cryptocurrency market, factoring in elements he previously overlooked. This article delves into the key takeaways from his latest analysis.
### Overlooked Factors Influencing Predictions
In his essay, Hayes acknowledges that he missed certain factors that led to a misjudgment of the Federal Reserve’s monetary policy impact. Initially, he believed that announcements about policy reversals would have a different effect on the markets. However, new insights have led him to predict that the sideways movement or decline of digital assets will persist at least until the end of September. This trend will only be halted by liquidity injections from the U.S. Treasury.
### The Pavlovian Reflex and Market Reactions
Hayes uses the analogy of Pavlov’s dogs to describe how investors have developed a conditioned reflex to buy during rate cuts. This behavior was formed during times of subdued inflation when the Federal Reserve would ease monetary conditions at the first sign of deflation. However, the fiscal policies adopted to combat the COVID-19 pandemic have ended the deflationary era and triggered an inflationary cycle. To counteract their own actions, regulators raised interest rates, convincing bond markets of their seriousness and limiting bond yields.
### The Role of U.S. Treasury Bonds
Hayes emphasizes the importance of the U.S. Treasury bond market due to the dollar’s reserve status. The Federal Reserve’s aggressive rate hikes from March 2022 to July 2023 kept the yield on 10-year Treasury bonds below 4%, even when inflation hit 40-year highs. This was because expectations of further monetary tightening acted as a strong deterrent.
### Jackson Hole Meeting and Market Shifts
Everything changed at the August 2023 Jackson Hole meeting, where Federal Reserve Chair Jerome Powell indicated a pause in the rate hike cycle. Although the inflation threat remained, driven primarily by government spending, the market’s reaction shifted. The yield on 10-year Treasury bonds began to rise sharply, impacting stock prices and raising concerns about regional bank bankruptcies.
### Treasury Liquidity and Market Reactions
Hayes notes that after Powell’s speech, the U.S. Treasury, led by Janet Yellen, intervened to provide dollar liquidity to the markets. This action was necessary to prevent a financial system collapse and was similar to what Hayes described in his earlier essay “Bad Girl.” The Treasury’s decision to increase the issuance of short-term government bonds helped stabilize markets temporarily.
### Impact on Bitcoin and Other Cryptocurrencies
Hayes observes that Bitcoin is highly sensitive to changes in dollar liquidity. Following the Federal Reserve’s policy announcement, Bitcoin’s price surged to $64,000 before dropping by 10% as reverse repo balances increased by $120 billion. Hayes predicts that Bitcoin will continue to move sideways or decline until the Federal Reserve’s September meeting, where he expects no rate cut. Despite this, he remains long-term bullish on Bitcoin and plans to increase his holdings of reliable altcoins.
### Government Spending and Inflation
The Federal Reserve has not addressed the most significant inflation driver—government spending. Politicians are unlikely to cut spending or raise taxes unless financing the deficit becomes too expensive. Hayes warns that if the Federal Reserve does not tighten conditions, the market will.
### Potential Future Scenarios
Hayes envisions a scenario where the Federal Reserve’s policy reversal in 2024 could drive 10-year bond yields to 5%, prompting another liquidity injection from the Treasury to prevent a banking system collapse. This could also impact mortgage rates and housing affordability, crucial issues for American voters. Given Janet Yellen’s loyalty to the Democratic Party, Hayes believes the Treasury will do everything possible to ensure Kamala Harris’s victory in the presidential election.
### Final Thoughts
Hayes anticipates that financial regulators will intervene by the end of September. Until then, Bitcoin is expected to remain stagnant, and altcoins may decline further. He has revised his earlier bullish market predictions for September but maintains his long-term positive outlook. Hayes plans to increase his holdings of altcoins with real-world utility as their prices decline relative to his fair value estimates.
Arthur Hayes’ latest essay provides valuable insights into the intricate dynamics between government policies, monetary decisions, and the cryptocurrency market. His analysis underscores the importance of staying informed and adaptable in the ever-evolving financial landscape.