Arthur Hayes, former CEO of BitMEX, warned crypto investors that there could be more forced selling in the short term. Citing a famous quote from legendary investor Warren Buffett, Hayes claims that the market is currently in the process of figuring out who is swimming naked.
These statements by Buffett are in line with the ongoing cryptocurrency market crisis as major players like Celsius and Three Arrows Capital quickly resolved. As noted by Hayes, Canada’s Purpose Bitcoin ETF liquidated 24,500 Bitcoins on Friday, representing about half of its total holdings.
Bitcoin’s price dropped as low as $17,600 on Saturday, hitting its lowest level since early December 2020. Hayes believes the brutal sell-off was due to a forced sell that triggered a massive stop-loss order.
While the price of the largest cryptocurrency on the Bitstamp exchange has since surged to $20,629, the Bitcoin bulls may not be out of the woods yet. Due to poor risk management and “generous” lending conditions by crypto lenders, Hayes thinks there may be more forced sales.
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