By Chris Hollingworth 
Bitcoin’s price is not likely to reach $77,000 again in the near future following the Federal Reserve’s indication of a slowdown in quantitative tightening (QT), as per BitMEX co-founder Arthur Hayes. Bitcoin experienced a dip close to the $77,000 mark on March 10, marking its first drop to that level since November, according to data from CoinMarketCap. Hayes expressed uncertainty about whether $77,000 was the bottom, suggesting that QT is essentially coming to an end after the Fed’s announcement on March 19 that it will decrease its monthly Treasury cap from $25 billion to $5 billion starting in April.
Bitcoin has seen a 3.53% increase over the past week, potentially due to the easing of liquidity pressures and the positive impact on risk assets like Bitcoin resulting from the slowdown in QT. Quantitative tightening involves central banks selling assets to decrease the money supply and potentially raise interest rates. Hayes also mentioned the need for either an SLR exemption or a restart of QE to further boost market sentiment.
The Supplementary Leverage Ratio (SLR) exemption was a temporary measure during the COVID-19 pandemic that allowed banks to exclude US Treasury securities from their SLR calculations. On the other hand, quantitative easing (QE) is a monetary policy tool aimed at stimulating the economy and promoting increased spending. Real Vision’s chief crypto analyst Jamie Coutts echoed Hayes’ sentiment, stating that “QT is effectively dead” and highlighting the calming of “treasury volatility” as a positive sign for liquidity.
Other industry experts, including Axie Infinity co-founder Jeff “JiHo” Zirlin and Bitcoin venture capitalist Mark Moss, also expressed optimism following the Fed’s announcement, suggesting that the slowdown in QT could provide significant support to both crypto and equity markets. The overall sentiment in the crypto market has seen an uptick post the Fed’s comments, with the Crypto Fear & Greed Index moving into “Neutral” territory at 49 after being in the “Fear” zone since late February.
Despite Bitcoin’s decline of nearly 22% from its all-time high of $109,000 in January, Infinex founder Kain Warwick views this as a normal mid-bull correction. Warwick remains bullish on Bitcoin, emphasizing the cyclical nature of the market and foreseeing a gradual upward trend throughout the year.
In conclusion, the recent developments surrounding quantitative tightening and the Federal Reserve’s actions have generated mixed reactions within the crypto community, with many industry insiders maintaining a positive outlook on the future performance of Bitcoin and the broader market.
