Hayes argues that speculators and leveraged players across the market have no Bitcoin left to sell.
BitMEX co-founder and renowned crypto essayist, Arthur Hayes, thinks the worst of this year’s Bitcoin bear market has come to pass.
The former CEO believes the three major cohorts of forced Bitcoin sellers – trading firms, miners, and speculators – have already capitulated, marking the bottom of Bitcoin’s market cycle.on Friday, centralized lenders begin by going bankrupt when they lend to parties that cannot pay them back, and when they face duration mismatches. The latter is when depositors expect their assets back in a short time frame, but the institutions have lent them out on a long time frame.
In order to satisfy capital calls, CELs will begin liquidating the collateral on the short-term loans they have provided to other industry players. That collateral is usually denominated in either Bitcoin or Ether – meaning both assets start facing major sell pressure. They also begin to call on miners they’ve lent to either shore up Bitcoin or their mining rigs.
The combined sell pressure causes the price of Bitcoin to fall rapidly in the lead-up to a wave of bankruptcies. For example, as both Three Arrows Capital and Alameda Research encountered trouble during this cycle, vast amounts of Bitcoin and Ether were sold across centralized and decentralized exchanges.
Hayes believes Bitcoin miners have also run out of coins to sell. Faced with a combination of rising energy prices, greater network difficulty, and a falling Bitcoin price, such firms have been forced to liquidate their Bitcoin holdings and mining equipment as they get margins called.
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