The co-founder of cryptocurrency exchange BitMEX, Arthur Hayes, suggests that Bitcoin could fall to $70,000 if large hedge funds start exiting their positions in US Bitcoin exchange-traded funds.
On Feb. 24, Hayes shared on X that a significant drop could occur due to substantial outflows from spot BTC ETFs such as the BlackRock iShares Bitcoin Trust (IBIT).
Hayes explained many IBIT investors are hedge funds that have taken long positions in ETFs and short positions in CME futures to earn low-risk yields greater than that from short-term US Treasuries.
If the yield declines along with a drop in the price of Bitcoin, these funds may decide to sell their IBIT holdings and buy back CME futures.