Arthur Hayes, the co-founder and former CEO of BitMEX who now manages a family office named Maelstrom, said the crypto bull market is “reawakening” following interest rate cuts by the Bank of Canada, then the European Central Bank this week.

On Wednesday, the Bank of Canada became the first major central bank to cut interest rates this year, reducing them a quarter-point to 4.75%. The European Central Bank followed suit yesterday, cutting rates by the same amount to 4.25%.

The central banking “fireworks” set off by these decisions will “catapult crypto out of the northern hemispheric summer doldrums,” Hayes added in his June 6 Substack post.

This wasn’t Hayes’ base case, explaining he expected the catalyst to come in August when the U.S. Federal Reserve hosts its Jackson Hole Symposium, where significant economic policy changes are typically announced.

Next up on the economic calendar is the Fed’s FOMC meeting on June 11-12, followed by the G7 Leaders' Summit in Apulia, Italy on June 13-14.

“The big question is whether the Fed will start cutting rates this close to the November U.S. presidential election,” Hayes said. However, Hayes said the Fed typically doesn’t change course this close to an election and still believes it is “political suicide” to cut rates in the U.S. at this time, given persistent concerns around inflation, adding that his base case was the Fed holds rates at its next meeting.

Hayes expects no changes from the Bank of Japan either but suggested the Bank of England meeting shortly after the G7 event could provide the next interest rate surprise to the downside, given the BOC and ECB cuts.

“The BOE has nothing to lose,” Hayes said. “The Conservative Party is going to get their ass handed to them at the next election, so there is no reason to disobey orders from the rulers of their former colony in order to keep a lid on inflation.”

Breadth of central bank rate changes. Image: Arthur Hayes.

Ultimately, the trend is clear, Hayes said. “Central banks at the margin are starting easing cycles. Go long bitcoin and subsequently sh*tcoins.”

“For the Maelstrom portfolio projects, who asked for my opinion on whether to launch their tokens now or later. I say, Let’s F*cking Go!,” he added.

In early May, with the bitcoin price around $59,000, Hayes predicted it could rally back toward $70,000 amid policy announcements from the U.S. Federal Reserve and Treasury Department that amounted to “stealth forms of money printing.”

Bitcoin BTC -0.49% is trading for $71,263 at publication time, according to The Block’s prices page.

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