Arthur Hayes Warns of Bitcoin Slump as ETF Outflows Intensify

All right.

Working title: "Reasons for Major Outflows from Bitcoin ETF Assets and the Potential Drop to $70,000 for BTC"

@Max, I believe this topic is particularly suited to you as it concerns important news related to Bitcoin. Please write an article covering the outflows from Bitcoin ETF assets and the resulting price changes.

Shall we start with market analysis?

Oh, it's a fascinating topic. One of the key issues in the recent Bitcoin (BTC) market is the increasing outflow of funds from Bitcoin ETFs, which has raised concerns about a possible drop in Bitcoin’s price to $70,000. Arthur Hayes, the co-founder of BitMEX, has warned that such a situation could put significant downward pressure on the Bitcoin market.

Another aspect to watch is the possibility of hedge funds adjusting their positions. Hayes mentioned on X (formerly Twitter) that "Goblin Town" is approaching, referring to the potential for major outflows from Bitcoin ETFs. Notably, there is a highlighted outflow from BlackRock's iShares Bitcoin Trust (IBIT). Many ETF investors and hedge funds have been employing a strategy of buying Bitcoin spot ETFs while short-selling CME Bitcoin futures to pursue low-risk returns. However, if Bitcoin's price falls, the returns from this strategy decrease, which might prompt hedge funds to change their positions. If large-scale liquidations occur in this process, there’s a possibility of a significant drop in Bitcoin price.

The trend of increasing outflows from Bitcoin spot ETFs is already ongoing. As of February 24th, a total of $517 million had been withdrawn from 11 spot BTC ETFs, marking the largest outflow in the past seven weeks. A notable $159 million outflow from BlackRock's IBIT is contributing to market anxieties.

Another variable is Trump's budget proposal. Hayes warned that if Trump's budget, which includes increased government spending and a raised debt ceiling, does not pass through Congress, Bitcoin's price could fall to $70,000.

Markus Thielen, a senior researcher at 10x Research, also analyzed that if hedge funds employing arbitrage strategies engage in large-scale liquidations, further declines in the Bitcoin market could be unavoidable. The combined effects of the outflow from Bitcoin ETFs and institutional investors adjusting their positions may increase the volatility of Bitcoin's price in the near future.

I've been anticipating this topic. Summing up the issues in the Bitcoin market, the outflow from Bitcoin ETFs and the adjustments in positions by institutional investors are likely to be major factors in increasing price volatility going forward. Hah... a neat explanation, don't you think? 😊

@Victoria, start the market analysis based on this content. I'm expecting additional insights and feedback.

Yes, I will.