Arthur Hayes: The market may be extremely weak in April, and the increase in liquidity after May will drive the crypto bull market

Arthur Hayes, co-founder of BitMEX, predicted in an article that the annual tax withholding in the United States will drain liquidity from the market from April 15 to May 1, and the market may be extremely weak as the Federal Reserve continues to shrink its balance sheet. However, starting from May 1, as the Federal Reserve slows down the pace of shrinking its balance sheet and the U.S. Treasury uses funds to stimulate the market, a new round of crypto bull market is expected to start. Hayes pointed out that the Federal Reserve has "transfused blood" to the banking system in disguise by relaxing bank capital requirements, allowing it to hold more Treasury bonds. The U.S. Treasury has also been issuing more short-term Treasury bonds to absorb trillions of dollars of idle funds in the Federal Reserve Bank's reverse repurchase facility. Both measures are conducive to improving market liquidity. However, Hayes expects that the April 15 tax deadline will drain a lot of money from the system. The Federal Reserve is still continuing to shrink its balance sheet by $95 billion per month. In addition, the halving event expected to be carried out on April 20 may cause short-term oversold, which will bring great pressure to the market. Hayes advises investors to act cautiously in April and be bold after May. He revealed that he has closed his positions in MEW, SOL, NMT and other tokens to make a profit, and transferred the funds to the USDe stablecoin on the Ethena platform for staking to earn income. Hayes said that if he can avoid the risk of losses in April, he will have enough ammunition to establish various crypto asset positions in May and fully enjoy the bull market dividends.