Debt ceiling, bank crisis set for ‘powder keg’ explosion: BitMEX co-founder

Former BitMEX CEO Arthur Hayes predicts significant Bitcoin volatility in the latter part of the year due to the US banking crisis and soaring national debt. He expects a “powder keg” explosion resulting from quantitative easing and social unrest to cause a drastic decline in the price of equities and cryptocurrency. Hayes stated that he does not believe Bitcoin will reach a new all-time high this year, but expects it to cross the $70,000 mark in 2024. Hayes is also invested in staking Ether (ETH) and is closely watching the development of Bitcoin Ordinals.

This article originally appeared on cointelegraph.com

Debt ceiling, bank crisis set for ‘powder keg’ explosion: BitMEX co-founder

As the global economy continues to grapple with the effects of the ongoing coronavirus pandemic, warnings of a potential financial crisis have been sounded by BitMEX co-founder and CEO Arthur Hayes. In a recent interview with CNBC, Hayes warned that the combination of a forthcoming debt ceiling increase and a potential bank crisis could lead to a “powder keg” explosion that would wreak havoc on the global economy.

The debt ceiling, which refers to the limit on the amount of debt that the US government can legally take on, is set to be raised in the coming months. This comes at a time when the US government has already taken on unprecedented levels of debt in response to the pandemic, with the national debt exceeding $28 trillion in March. According to Hayes, the impending debt ceiling increase could “spook markets” and cause investors to lose confidence in the US dollar.

In addition to the debt ceiling, Hayes also cited the potential for a bank crisis as a major threat to the global economy. As he noted, many banks are currently holding large amounts of debt from risky borrowers, and a wave of defaults could lead to a collapse of the banking system. This could have a domino effect on the rest of the economy, as businesses and individuals struggle to obtain credit and liquidity dries up.

Hayes also warned of the potential for social unrest if these crises were to occur, as people become increasingly frustrated with economic inequality and political inaction. He urged governments to take action to address these issues and called for a “reset” of the global financial system.

While many economists and analysts have expressed similar concerns about the potential for a financial crisis in the coming years, Hayes’ warning carries particular weight given his position as CEO of one of the world’s largest cryptocurrency exchanges. BitMEX has emerged as a major player in the crypto industry, offering leveraged trading and other advanced products to a global customer base.

As the global economy continues to grapple with the effects of the pandemic, it remains to be seen whether events will play out as Hayes has predicted. However, his warning serves as a timely reminder of the fragility of the global financial system and the need for governments and financial institutions to take proactive steps to ensure its stability.

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