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As the crypto community eagerly awaits the decision on the Bitcoin ETF by Jan. 10, former BitMEX CEO Arthur Hayes has made a bold prediction in his latest essay, titled “Signposts.” Hayes foresees a significant correction for Bitcoin in the near future, ranging between 20% to 30%.
At the same time, he suggests that this correction could potentially escalate to a more substantial 30% to 40% if U.S.-listed spot Bitcoin ETFs commence trading.
In his essay, BitMEX founder articulates his trading strategy, expressing confidence in his ability to time the market. He plans to make a strategic move in late February, attempting to capitalize on what he believes will be the peak of the BTC price.
Hayes’ plan
To hedge against potential losses, crypto entrepreneur intends to purchase put options with a June 28 expiry date. Despite the higher cost of longer expiries, Hayes believes the reduced premium decay justifies the expense.
Hayes is cautious about the impact of massive fiat inflows into Bitcoin ETFs, warning of a potential dollar liquidity “rug pull.” This concern leads him to delay any Bitcoin purchases until after the March decision dates. He emphasizes the need to select a strike price for the put options carefully, aiming for 20% to 25% out of the money based on the current at-the-money quarterly June futures contract price.
With central banks flooding the market with printed money and the imminent launch of U.S.-listed and Hong Kong-listed spot Bitcoin ETFs, Hayes sees the current market sentiment as overly bullish. He highlights the importance of taking a non-consensus view, suggesting that the risks and rewards from a trading perspective favor a more cautious approach.