Bitcoin tends to follow tech stocks, meaning the world's largest cryptocurrency could fall to $30,000 by June, Arthur Hayes, co-founder of cryptocurrency trading platform BitMEX, said on Monday.
Hayes said in a blog post on Monday that the same scenario could send Ethereum down to $2,500. Bitcoin and Ethereum are currently trading around $42,300 and $3,180, respectively.
Hayes said he is buying "crash" puts that expire in June on both cryptocurrencies, while noting that he remains "long on cryptocurrencies" in general.
Expectations of a series of fed rate hikes in the coming months weighed on cryptocurrency and tech stocks, with the Nasdaq 100 index falling 3.6% last week and Bitcoin briefly falling below $42,000 on Monday.
Bitcoin's 90-day correlation with the Nasdaq 100 index hit a record, undermining its appeal as a diversification tool. Hayes said slowing global growth and less accommodative central bank policy will weigh on tech stocks and, in turn, cryptocurrencies. He admits that his predictions for Bitcoin and Ethereum are largely based on "gut feeling."
The cryptocurrency market, he wrote, "will lead the stock market down when we go into recession and up when we come out." "Bitcoin and Ethereum will bottom out before the Fed moves to reverse its policy from tapering to easing."