In a series of tweets, Arthur Hayes shared his opinion on the current situation with banks and how it could affect the cryptocurrency market.
BitMEX co-founder believes that the collapse of First Republic Bank will not be the last in the financial sector.
Hayes expects other local banks may have liquidity problems as well, as the U.S. Federal Reserve (Fed) prepares to raise interest rates again.
According to Hayes, the Fed either “doesn’t know what it’s doing, or it does and prays that the market is stupid.”
Either way, raising rates guarantees the collapse of yet another bank that is too big to fail, Hayes wrote. He suggested that illiquid commercial real estate loans would dominate this bank’s loan portfolio.
The BitMEX co-founder noted that a crisis in the banking sector could trigger macroeconomic shocks that would spur a rapid rise in bitcoin to $1 million.
The Fed’s response to the banking crisis will increase interest in the flagship cryptocurrency and the entire cryptocurrency space.
Compared to other savings vehicles such as gold and real estate, bitcoin may be the most attractive option for investors looking to protect their savings, Hayes says.
Earlier in the year, Hayes’ forecasts were more restrained – he was confident that bitcoin could plunge to previous lows if Fed policy remained unchanged.