Arthur Hayes: Cryptocurrency may plummet within a few days after the Fed's first rate cut, the era of central banks is over

BitMEX co-founder Arthur Hayes said in an interview during the Token2049 conference in Singapore that the Federal Reserve is about to announce its first rate cut since 2020, but risk assets (including cryptocurrencies) may plummet within a few days after the rate cut. Hayes believes that the rate cut is a bad decision because inflation is still a problem in the United States and lower borrowing costs will exacerbate inflation. In addition, the narrowing of the US-Japan interest rate gap may lead to a sharp appreciation of the yen, triggering the unwinding of yen carry trades. Hayes expects US interest rates to eventually fall from the current 5.25%-5.5% to near zero. He agrees with Scottish market strategist Russel Napier that the era of central banks is over and politicians will take over and instruct banks to create liquidity in specific areas of the economy. Hayes said that in this case, cryptocurrencies will become the only assets that are globally portable and can allow investors to get rid of the system. (Coindesk)