Arthur Hayes: Has taken profits on SOL and meme coins, waiting to shine in May

BitMEX founder Arthur Hayes published "Heatwave," in which he analyzed several imminent factors affecting liquidity. This prompted him to close his positions in SOL and several meme coins, temporarily storing the funds in the Ethena project. He plans to increase his holdings in shitcoins once everything settles by May 1.

The U.S. Tax Season Ends in Mid-April

The U.S. tax season will end in mid-April, and taxpayers may need to withdraw cash from the financial system through selling securities and other means. Analysts estimate that investors received a large amount of interest income last year, coupled with the strong performance of the stock market. The U.S. imposes capital gains tax, and the tax amount for the 2023 tax year is expected to be higher than before.

The Fed May Slow Down Balance Sheet Reduction in May

The next Federal Reserve meeting is scheduled for May 1st. Although the market expects the Fed to keep interest rates unchanged at a high point, analysts such as Joe Kalish from Ned Davis Research predict that the Fed will announce a slowdown in Quantitative Tightening (QT) speed during the meeting, which will be beneficial for the liquidity of the U.S. dollar.

Bitcoin Halving and Its Impact on Price Trends

The Bitcoin block reward is expected to halve on 4/20. This is seen as a catalyst for the rise in the cryptocurrency market. While Hayes agrees that it will help boost prices in the medium term, he believes the price trend before and after the halving could be negative. Because the notion that halving is price-positive is deeply ingrained, when most market participants hold the same view, the opposite tends to happen. Therefore, Hayes will stay away from entering the market before and after the halving.

Take Profit First, Re-enter the Market in May

Hayes mentioned that he has closed all positions in MEW, SOL, NMT, and placed them in Ethena's USDe for staking and earning rewards.

Hayes believes that if his prediction about U.S. dollar liquidity comes true, he will be more confident in going long on various shitcoins. Even if he is wrong, missing out on a few percentage points of profit would be a relatively acceptable outcome. He is already packing his bags to celebrate the cryptocurrency bull market with everyone at Token 2049 event in Dubai!