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Why did Bitcoin drop last week? Hayes points to US taxes and tensions

2min Read

Tensions in the Middle East accelerated Arthur Hayes’ projection of massive crypto sell-offs around the BTC halving.


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  • Arthur Hayes blames BTC drop on liquidity issues and Middle East tensions. 
  • Middle East tensions remain a key factor in the BTC’s short-term price action. 

Bitcoin [BTC] had a positive price correlation to gold over the past few days. However, the correlation de-coupled over the past weekend as BTC plummeted while gold pumped.  

At the time of writing, BTC traded at $63K, down more than 15% from its mid-March record high of $73.7K. 

BitMEX founder and crypto investor, Arthur Hayes, blamed the price drop and BTC/gold de-coupling on US tax payments and Middle East tensions. 

“BTC and GOLD in lockstep until … weekend before April 15th tax payments due in US. But Israel / Iran war tension rose the same weekend, and BTC dumped while $GOLD was closed.

GOLD opens high on Mon, while BTC dipped again. BTC still works, people just gotta pay their taxes.”

Liquidity crunch during BTC halving

Last week, Hayes noted that the BTC halving event, scheduled for around 19th April, coincided with a “time when dollar liquidity is tighter than usual.” 

He cited US tax payments in mid-April as one of the catalysts that would drain liquidity off the market and; 

“Add propellant to a raging firesale of crypto assets.” 

Tensions in the Middle East accelerated his projections.

As tensions escalated, about $143B was wiped off the crypto market last Saturday, per Trading View data. The overall crypto market cap barely held up above $2.2 trillion at press time. 

As always, Bitcoin opponent and financial commentator, Peter Schiff, couldn’t restrain from leveraging the drawdown to criticize BTC investors. He stated

“Bitcoin is trading below 27 ounces of gold. It’s now down over 27% since hitting its record-high of 37 ounces of gold 2.5 years ago. Given all the hype about Bitcoin and lack of coverage of gold, few likely realize Bitcoin is in a stealth bear market when priced in real money.” 

Even so, Hayes had previously projected that the liquidity crunch would ease at the beginning of May. 

However, BTC seems to have priced out Middle East tensions, and psychological support of $60K is critical to bulls.

Additionally, ETF flows have dried, as US spot BTC ETFs recorded net outflows of $36.7 million on 15th April. 

So, a full-blown crisis in the Middle East could potentially drag it below $60K with massive discounts. 


Benjamin is a Telecommunication Engineering graduate who is passionate about crypto-markets and unraveling market trends. Armed with charts and patterns, he's interested in making the intricate, complex landscape of digital assets more palatable for every user.
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