Arthur Hayes: Bitcoin ETFs May Attract Billions from TradFi

• Bitcoin Market Inefficiency Attracts Billions from Financial Markets, Says Arthur Hayes
• Spot Bitcoin ETFs Offer New Trading Opportunities
• The Emergence of Spot ETF Products in Major Asian Markets
• Potential Growth in ETF-Based Financing
• Hayes's Short-Term Outlook on Bitcoin

Bitcoin Market Inefficiency Attracts Billions from Financial Markets, Says Arthur Hayes

Market discrepancies and bitcoin's (BTC) uncorrelated behavior towards traditional assets are a few reasons that attract significant capital from the larger financial markets, according to Arthur Hayes, the Chief Investment Officer of family office Maelstrom and former CEO of BitMEX.

Spot Bitcoin ETFs Offer New Trading Opportunities

Hayes, who is recognized as one of the earliest major bitcoin traders, proposed that spot bitcoin exchange-traded funds (ETFs) might introduce fresh trading possibilities. As the asset prices tagged at U.S. standards fluctuate compared to the rest of the world, traders could profit from this variance.

Hayes stated, Bitcoin$42,260 -0.64% is a global market, and price discovery primarily occurs on Binance (presumably located in Abu Dhabi). For the first time in a long while, bitcoin markets will present a predictable and long-lasting arbitrage opportunity.

He further added, Anticipatedly, billions of dollars of flow will converge during an hour-long span on exchanges that are less liquid and price followers of their larger Eastern counterparts. I foresee juicy spot arbitrage opportunities being available.

The Emergence of Spot ETF Products in Major Asian Markets

Hayes believes that spot ETF products will emerge in major Asian markets, such as Hong Kong, servicing the China southbound flow. The existence of these heavily regulated exchanges and native crypto exchanges can engender more market inefficiencies, thus generating more profit opportunities.

Potential Growth in ETF-Based Financing

ETF-based financing is another potential growth sector as bitcoin trading becomes normalized in the upcoming years. Banks may launch desks that offer fiat loans against bitcoin ETF holdings, thereby securing the spread and impacting bitcoin interest rates, further contributing to market imbalances.

Hayes's Short-Term Outlook on Bitcoin

Earlier in January, Hayes expressed a bearish outlook on bitcoin in the short term, anticipating prices to experience a 30% correction. This view is echoed by several other traders, who predict prices to drop as low as $38,000 before the next upward movement.

Edited by Jonathan Stoker