Arthur Hayes predicts bitcoin’s collapse to $ 70,000

Bitcoin BTC $86,874.63 Bitcoin -8.15% Market capitalization $1.72 trillion VOL. 24 hours $6.7 billion may fall to $ 70,000 due to a massive exodus of investors from spot ETFs, BitMEX co-founder Arthur Hayes said. In his opinion, large hedge funds that have been playing arbitrage between ETFs and futures on the Chicago Mercantile Exchange (CME) may start closing their positions, which will put additional pressure on the market. He noted that investors who bought shares of BlackRock’s iShares Bitcoin Trust (IBIT) may now start selling to lock in profits.

The main strategy of hedge funds was to buy ETFs while opening short positions on CME futures, earning income from the price difference. But if the spread between the spot price of bitcoin and futures shrinks, these funds will start selling ETFs and buying back futures, further exacerbating the market’s decline. Now that this yield is equal to the yield on U.S. Treasury bonds, traders will start to exit the market, which could push bitcoin to the $ 70,000 mark.

Over the past day, bitcoin has fallen by 5%, hitting a low of $ 91,000, but has recovered slightly since. The overall trend remains negative, especially amid massive capital outflows from spot ETFs. On February 24 alone, investors withdrew $ 517 million, the largest outflow in seven weeks. BlackRock lost $ 159 million, Fidelity lost $ 247 million, and outflows were also recorded in Bitwise, Invesco, VanEck, WisdomTree, and Grayscale funds.

Over the past two weeks, only one trading day showed inflows into spot ETFs, indicating a change in investor sentiment. If capital outflows continue, bitcoin could fall even further, and the market will enter a protracted correction phase.