Billionaire Arthur Hayes Analyzes the State of Crypto Markets, Says Several Major Players Run Out of Bitcoin to Sell

BitMEX founder Arthur Hayes considers the possibility that Bitcoin has already bottomed in the bear market, saying three key players are likely short of BTC sale.

In a new blog post, the crypto veteran identifies three groups of investors who have been forced to part with their Bitcoin hoards this year due to the misuse of leverage: centralized lending and trading companies, Bitcoin miners and ordinary speculators .

Looking first at centralized firms, Hayes says these institutions likely unloaded most of their BTC after the collapse of crypto hedge fund Three Arrows Capital (3AC) and Sam Bankman-Fried’s trading firm Alameda Research.

“When these two firms [Alameda and 3AC] got in trouble, what did we see? We have seen large transfers of the most liquid cryptos – Bitcoin (WBTC in DeFi) and Ether (WETH in DeFi) – to centralized and decentralized exchanges which were then sold off. This happened during the big move…

I can’t demonstratively prove that all of the Bitcoins held by these failing institutions were sold off during the multiple crashes, but it appears they did their best to liquidate the most liquid crypto collateral possible just before they went under.

The [centralized lending firms] and all major trading companies have already sold most of their Bitcoins. All that remains are illiquid sh**coins, private stakes in crypto companies, and locked presale tokens.

As for Bitcoin miners, Hayes says they’ve sold their BTC since the first credit crunch in June, when the crypto king fell below $20,000 for the first time in over 18 months.

“They have to do this to try to stay current on their heavy trust debts. And if they don’t have any debt, they still have to pay their electricity bills – and because the price of Bitcoin is so low, they have to sell even more of it to keep the facility operational.

Source: Arthur Hayes/glassnode

As for ordinary speculators, Hayes says he looks at the amount of open interest (OI) on long and short contracts to gauge the level of speculation in the markets. According to him, OI’s all-time high coincided with BTC’s all-time high. The OI also dipped as the market fell, suggesting speculators were wiped out.

Source: Arthur Hayes/glassnode

Hayes concludes by saying that he is not 100% certain that Bitcoin’s current bear market low around $15,900 is the all-time low, but he says BTC has rebounded from this level due to “of the cessation of the forced sale caused by a credit crunch”. He also notes that everything is cyclical.

“What goes down will come up.”

At the time of writing, Bitcoin is changing hands for $17,170.

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Disclaimer: Opinions expressed on The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and transactions are at your own risk and any loss you may incur is your responsibility. The Daily Hodl does not recommend the buying or selling of cryptocurrencies or digital assets, nor is The Daily Hodl an investment adviser. Please note that The Daily Hodl engages in affiliate marketing.

Feature image: Shutterstock/kersonyanovicha/David Sandron

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