Bitcoin’s Short-Term Price Depends on U.S. Politics

Arthur Hayes believes that Bitcoin’s (BTC) short-term price forecast will be shaped by U.S. politics. The founder of BitMEX stated on the social media platform X that it is currently “time to chill out, retrace, and wait.”

Hayes suggests that if President Donald Trump’s budget, which includes more spending and a debt ceiling increase, fails to pass through Congress, BTC’s price could fall back to levels seen before the election victory, ranging from $75,000 to $70,000. He highlights that this would be a test of Trump’s control over the Republican Party.

Hayes: Hedge Funds to Sell IBIT and Buy CME Futures if Bitcoin Price Drops

Hayes also mentions that hedge funds that purchased BlackRock’s iShares (IBIT) spot Bitcoin ETF could sell if BTC’s price continues to drop. He explains that most IBIT holders are hedge funds that are holding the ETF long while shorting CME futures, aiming to earn a higher yield than short-term U.S. Treasury bonds. If this yield gap decreases as BTC’s price falls, these funds will sell IBIT and buy back CME futures.

He adds that these funds are currently in profit and, since their yield is close to U.S. Treasury bond rates, they will likely close their positions and realize their profits during U.S. trading hours. Hayes emphasizes that the $70,000 level is a crucial psychological barrier for Bitcoin and will be closely watched.

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