Quantitative Easing Policy Turning Point? BitMEX: Central Banks' "Interest Rate Cut Battle" Will Drive Bitcoin to $20,000 by the End of the Year

The cryptocurrency market experienced an overnight crash, with the total market capitalization halved and over $80 billion evaporated, leading to a more than 40% drop in major coins. BitMEX CEO seems to have foreseen this, believing that Bitcoin, even in the midst of global financial turmoil, will not be spared, but is expected to reach $20,000 again after a rate cut battle among countries by the end of the year.

• Global Zero Interest Rates Coming Soon
• Bitcoin to Rebound to $20,000 by End of the Year

Fed Running Out of Ammunition

In his latest post on the official Blog (12th), BitMEX CEO Arthur Hayes mentioned that the Federal Reserve will hold its regular Federal Open Market Committee (FOMC) meeting on March 18, but the Fed is almost out of options:

They are almost out of bullets. Before rates hit zero, they only have 100 basis points (bps) left for interest rate cuts. They can of course go negative, but as we have seen in other central banks, this is not very effective in stimulating the economy.

If both supply and demand hit the global economy, rate cuts will be ineffective, and once the "rate cut war" begins, major central banks worldwide will cut their benchmark rates to zero.

Believe in Bitcoin

Arthur Hayes stated that these rate cut policies will make traditional safe-haven assets like gold and bonds (such as US Treasuries) "extremely bullish," and the asset liquidity generated by high inflation will drive up the price of Bitcoin:

Once central banks take rates to zero and start an "open-ended quantitative easing policy," just like we experienced in the 2008-2009 financial crisis, Bitcoin will rebound to $20,000 by the end of the year.

Note: "Open-ended" means without a deadline, until the economic situation improves.

Arthur Hayes also mentioned what he believes is the "market bottom": when the spot market leads the futures market, it's time to "get on board." First, aggressively buy Bitcoin, and then switch to various "shitcoins," as any garbage could potentially skyrocket, and you must catch this wave of wealth creation.

However, Larry Cermak, research director at the renowned media outlet The Block, tweeted in 2019 disagreeing with the effects of an economic crisis, and at least until now, his statement still holds true: "Why does everyone think a global financial crisis or currency war is good for Bitcoin? High-risk liquid assets are not welcomed in such an environment. Although no one really knows what will happen, having a blind default position is dangerous."

Bitmex Crash

In fact, yesterday's sharp drop set a new record for Bitmex, with over $500 million in Bitcoin futures liquidated in just one hour, and the high demand on the trading platform caused Bitmex to crash between 02:16 and 02:40 UTC.

According to their latest status page, the trading platform has resumed normal operation. Reports indicate that Bitmex had a daily trading volume of $11 billion yesterday, and the total trading volume of all Bitcoin futures exchanges exceeded the daily volume since May of last year.

• 'March 12th' - Cryptocurrency Doomsday, Setting Records (ongoing updates)
• On the evening of the 12th, US stocks plummeted across the board, triggering circuit breakers, with Bitcoin falling by 22%

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