In a recent blog post, Arthur Hayes, the founder of BitMEX, made a bold prediction on the potential impact of the approval and success of a Bitcoin (BTC) spot ETF (exchange-traded fund). Hayes suggests that if the Bitcoin spot ETF gains significant traction, it could trigger a shift in price discovery from East to West, disrupting traditional financial markets.
In a recent blog post, Arthur Hayes, the founder of BitMEX, made a bold prediction on the potential impact of the approval and success of a Bitcoin (BTC) spot ETF (exchange-traded fund). Hayes suggests that if the Bitcoin spot ETF gains significant traction, it could trigger a shift in price discovery from East to West, disrupting traditional financial markets.
Hayes presented Bitcoin as a possible escape from the fiat monetary degradation that has characterized the post-2008 era. Acknowledging Bitcoin’s immaturity during the 2008 financial crisis, Hayes argues that the cryptocurrency and the broader crypto market have proven resilient and capable of weathering severe crises, as demonstrated in 2022.
The narrative shifts to the events of 2023, when the Federal Reserve’s attempt to tighten financial conditions led to the bankruptcy of several US banks and major disruptions in the cryptocurrency market. Hayes highlights the contrasting resilience of decentralized assets like Bitcoin compared to centralized entities that faced bankruptcy.
He argues that the only way to avoid the collapse of the global financial system is to financialize Bitcoin by introducing a highly liquid Bitcoin ETF. Drawing parallels to the gold market, Hayes suggests that the approval of a Bitcoin ETF is a strategy used by financial elites to maintain capital within the system.
Long term trend
Hayes then shifted his focus to the potential market impact of the Bitcoin spot ETF, focusing particularly on the BlackRock ETF due to its prominence and global distribution capabilities. Hayes describes several trading opportunities that may arise, including the creation and redemption process, spot currency arbitrage, ETF derivatives such as exchange-traded options, and the impact of ETF funding transactions.
One remarkable prediction is the emergence of arbitrage opportunities in the Bitcoin market, especially with the ETF’s potential to concentrate trading on less liquid exchanges. Hayes believes this could create inefficiencies that expert arbitrageurs could exploit.
The blog post concludes with a discussion on the possible change in global inflation dynamics and the long-term trend favoring the complex crypto ETF. Hayes predicts that, despite potential market turmoil, the financialization of Bitcoin will continue to drive the cryptocurrency market to new highs by the end of 2024.
