Arthur Hayes, former Chief Executive Officer of the crypto exchange BitMEX and Chief Investment Officer at Maelstrom, has been the focus of scrutiny from the crypto community after signaling his opinion on Solana (SOL) on the Unchained podcast, which he featured in recently.
He said- Solana as a “high-beta Bitcoin,” meaning it is primed to do even better than Bitcoin when there’s an uptrend in the market despite the upcoming U.S. elections.
He acknowledged that given the upcoming elections in the U.S, Solana’s robust liquidity and degree of correlation with the price actions of Bitcoin can help it to perform considerably well when the price of Bitcoin is inclined.
Federal Reserve Decisions: Making more impact than politics
A significant aspect of Hayes’ argument was the fact that, more than any political event such as elections, Federal Reserve decisions – and in particular, interest rate changes – will affect the cryptocurrency market. As the next Federal Reserve interest rate decision approaches on November 7, Hayes believes that for the crypto markets, the impact of monetary policy is more positive and longer lasting than any potential price movements caused by transient electoral outcomes.
He remarked that the results of elections will most likely generate some short term management of the markets. However, it is the Federal Reserve’s management of the interest rates and the overall economic policy that has a more pronounced effect on the trends in cryptocurrency.
According to Hayes, the focus will continue to be on the monetary policy of the Federal Reserve and not on the short-term results of the elections. This is a view held by many investors nowadays who regard macroeconomic variables as the determinants of financial markets rather than the political ones.
Hayes Sees Potential in Solana: Liquidity and High-Beta Characteristics
Hayes expressed several reasons as to why he considers Solana to be a great investment. In his opinion, Solana is a high-beta asset which means that its price movements will be greater than that of Bitcoin’s, especially when the market is bullish. Liquidity in Solana also means that it is very agile, and traders can easily exploit its price movements. As per Hayes, he expects Bitcoin to rise, which would see Solana even higher because of this high-beta quality.
Furthermore, he juxtaposed Solana with Ethereum (ETH), stating that Ethereum, for the time being, is, in his words, ‘too slow’ and impossible to gain any investor interest without a new narrative that brings paramount dynamics. While dedicating some time to Solana, it is worth noting that it is also leading in the competition even at this point due to its swiftness and the confidence that it has managed to build among the investors.
The resilience of Solana: Recovery After the FTX Collapse
Hayes has indicated how the prior recovery of Solana after the FTX collapse is a testament to its resilience and potential for rapid appreciation of value. In the wake of FTX’s collapse, which caused concerns among the market players, the price of Solana, which had previously settled below $7, soared to over $180, making it clear that the asset rallies easily when the market moods are excellent. Such a phenomenal recovery has grabbed the attention of numerous traders and investors, which helps explain Hayes’s view that Solana is an asset worth holding by anyone eager to take advantage of the next bullish market.
Although Hayes was positive about the opportunities that Solana may present, he also raised some concerns about possible regulation. He implied that there would probably not be significant alterations in the regulatory outlook with change in the political dispensation, hence a conservatively optimistic outlook. Other industry players, not only Hayes, exhibit similar scepticism as many of them are concerned about the regulatory effect on the market.
Even Hayes urged traders to concentrate on fundamental market measures instead of political happenings, which tend to have a short-lived impact on the market. People also want to know what political events would happen next.
With the volatility of the market in mind, Hayes suggested that instead of relying on policy alterations, traders seek out assets with sound fundamentals, such as Solana. Here, the emphasis is on how investments should be made not on the prevailing politics or expected policy shifts but purely based on the growth potential of the investments.
Solana as a High-Beta Alternative to Bitcoin
To conclude, Arthur Hayes perceives Solana to introduce a new dimension into the present market scenario as a high-beta alternative to Bitcoin. Instead, he wants them to shift their focus away from particular political events and towards wider economic trends, which, from his analysis, includes liquidity, performance potential and macroeconomic conditions. Also, as it always is with crypto, handling the pulse of the markets and being prepared to turn around changes will be crucial for those looking to explore new vistas.
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