Former BitMEX CEO predicts end of crypto winter, potential recovery in 2023

Arthur Hayes, the former CEO of crypto derivatives platform BitMEX, thinks the worst might be over for Bitcoin. In a recent blog post, Hayes argued that the "largest most irresponsible entities" have run out of BTC to sell, and that the market could see some recovery in 2023.

Hayes believes that when centralized lending firms (CELs) have financial troubles, they will call in loans and sell BTC first. He argues that when CELs go bankrupt, they will sell their BTC holdings, leading to large-scale liquidations. However, Hayes thinks that these liquidations are now at an end, and that the market could start to recover in 2023.

One of the reasons for Hayes' optimism is his belief that the US Treasury market will become dysfunctional in 2023 due to the Federal Reserve's tightening monetary policies. At that point, Hayes expects the Fed to turn the "printer bank on" and for Bitcoin and other risk assets to spike higher.

In his blog post, Hayes also discussed the recent collapse of crypto exchange FTX and its impact on the market. He said that large physical sales of BTC are taking place on exchanges from CELs and trading firms who have had loans recalled.

"This is why the price of Bitcoin swoons before CELs go bankrupt," Hayes wrote. "While I can't demonstatively prove that all Bitcoin held by failed institutions was sold, it does look as if they tried their best to liquidate the most liquid crypto collateral they could right before they went under."

Hayes added that "there is no reason why you would hold on to Bitcoin if you had an urgent need for fiat," and that this is likely what has been driving the recent sell-offs in the market.

Despite the ongoing crypto winter, Hayes remains optimistic about the future of Bitcoin and the broader crypto market. He believes that the market could see some recovery in 2023, and that the Fed's actions will play a key role in this.

"As the Fed tightens monetary policy, the US Treasury market will become dysfunctional," Hayes wrote. "At this point, the Fed will turn the printer bank on and risk assets will spike higher. Bitcoin and other cryptocurrencies are no different."

Only time will tell if Hayes' predictions come true, but for now, many in the crypto community are taking his words to heart and holding on to their Bitcoin in the hopes of a brighter future.