Arthur Hayes, co-founder of BitMEX, believes that Bitcoin has been in a bull market for the past six months. However, he suggests that the broader market has yet to fully respond to this trend, but it will do so within the next six to 12 months.

The Catalyst: Federal Reserve’s Intervention

According to Hayes, Bitcoin’s bull run commenced on March 10, coinciding with the Federal Deposit Insurance Corporation’s takeover of Silicon Valley Bank (SVB). Just two days before SVB’s takeover, Silvergate Bank had gone into liquidation, and on March 12, New York regulators forced Signature Bank to close.

Hayes speaking at Korea Blockchain Week in Seoul. Source: Andrew Fenton/Coinbrit

In response to these developments and to prevent further collapses in the banking system, the Federal Reserve introduced the Bank Term Funding Program (BTFP). This program offered banking loans of up to one year in exchange for “qualifying assets” as collateral.

Bitcoin as a Hedge

Hayes views the Fed’s actions as effectively backstopping the entire banking system by creating more money. This, in turn, prompted market participants to consider fixed-supply assets like Bitcoin as a hedge.

Despite Bitcoin’s price increase of approximately 26% since March, Hayes believes the broader market has yet to fully react to this bull trend. He anticipates that this response will occur within the next six to 12 months.

Bitcoin’s Resilience

Hayes asserts that even if central banks like the Fed continue to raise interest rates for economic tightening or resort to further money printing, Bitcoin will continue to perform well. He believes that the cryptocurrency industry is well-positioned to thrive in both scenarios.

In essence, Hayes suggests that the Fed’s actions and Bitcoin’s performance have shifted the market’s focus away from the value of fiat currencies, emphasizing the growing interest in fixed-supply assets like Bitcoin as a result.