The future of cryptocurrency got some interesting scrutiny by Arthur Hayes, CEO of BitMex, in an interview with Yahoo Finance UK yesterday.
With an impressive financial background, Hayes was formerly a trader at Deutsche Bank prior to creating Bitmex in 2014. With a degree in economics from Wharton School of Business, the entrepreneur is well experienced in trading futures, forwards and swaps, and looking into the structuring of derivatives.
The BitMex platform, based in the Seychelles, is owned by HDR Global Trading Limited and facilitates a lot of leverage contracts provisioned in Bitcoin.
With all that in mind, Hayes told Yahoo that the current low market for Bitcoin and other major cryptocurrencies could last another year and a half.
Citing price volatility in 2013, and aftermath in the next two years that he called a “nuclear bear market,” Hayes said price stability has been recently confined by low trade volumes, and that the calm Bitcoin market could turn even calmer – which really isn’t such a great thing for investors who want to see some action. Yes, Bitcoin has been around the same price markers for months, but it hasn’t really been a great source of assurance to investors.
There’s another issue with such low activity environments – it really doesn’t support huge trading desks. Here’s where Hayes’ comments get interesting – while he cites reports of other dealers and exchanges shedding employees due to the low trade volumes, he characterizes his own company strategy this way:
“Our expansion plans have not changed; we continue to hire across the whole organization.”
Notwithstanding questions about what all of BitMex’s traders and staff are doing in this quiet market, Hayes’s comments underscore a particular philosophy related to this Bitcoin market: that sometimes no sign isn’t really a good sign after all. It’s good for everyone who’s holding Bitcoin in their portfolios and doesn’t want to see a drop – but it’s not great for generating that next enthusiasm that’s going to lead to the next level somewhere down the line and according to Hayes, a long term bear market is more than just a possibility.
For a closer look at this “non-action” on the market, you need look no further than today’s BTC USD chart. Price action has been practically non-existent, with that $6300 benchmark permanently on show, and trading volume, tellingly, has been really low too – since before Halloween. Let’s see if a “November event” pushes Bitcoin one way or the other.