Arthur Hayes: American Businesses Seeking Yield Will Drain US Banking System
Arthur Hayes, the founder of BitMEX, says that companies that want to do better than low interest rates are about to hit US banks again.
Hayes says in a new article that the recent “exodus” of people from US banks is likely to get worse.
From May 10th to May 17th, people took $30 billion out of American bank accounts, according to data from the Federal Reserve Economic Data (FRED) system.
Since last week, the numbers show an increase of more than $4 billion.
The total savings in US banks have gone down from $18.03 trillion a year ago to $17.15 trillion.
Hayes says that investors and businesses looking for better returns will likely pull their money out of banks again because US treasury-backed money market funds now have high rates.
“Over $1 trillion has been removed from the US banking system since last year. The big question going forward is, will this exodus continue? Will businesses and individuals continue to move money from 0% yielding bank accounts into money market funds yielding 5% or 6%?
Logic tells us the answer is an obvious and resounding ‘absolutely.’ Why would they not, if all it takes is a few minutes on their smartphones to 10x their interest income? The US private sector will continue to pull money from the US banking system until the banks offer competitive rates that match at least the Fed funds rate.”
Hayes also says that a bull market is coming for Bitcoin and that BTC will never go back to $20,000.
“I expect that Bitcoin will hold firm here. I do not believe we will retest $20,000 or come anywhere close. As money slowly trickles into the global risk asset markets, a strong base of support will form. Volatility and trading volumes always disappoint during the northern hemispheric summer months, so I am not surprised that degens plagued by boredom have checked out of crypto trading for the time being. I will use this time of calm to slowly increase my allocation to Bitcoin after the [US] Treasury’s General Account is replenished.
As more and more pundits start talking about what is happening to the billions of dollars printed by the Fed and US Treasury and handed out as interest, it will become common knowledge once more that the money printer is going brrr. And when the printer goes brrr, Bitcoin goes boom!”
