Recession fears triggered "Black Monday": stocks and cryptocurrencies both fell, did Hayes' prediction come true?

Trump's few words overturned the market, and the shadow of the US economic recession loomed. The bubble of buying US stocks and making money seems to be punctured. Affected by negative emotions such as the increasing concerns about the US economic recession, the US stock market encountered a Black Monday on Monday. As of the close of the day, the Dow Jones Industrial Average initially closed down 2%, the S&P 500 fell 2.7%, and the Nasdaq fell 4%. Tesla (TSLA.O) plummeted 15.4%, Apple (AAPL.O) fell nearly 5%, and Nvidia (NVDA.O) fell 5%.

In the crypto market, BTC fell below the $80,000 mark for the second time in three weeks, hitting a low of $77,400 in the past 24 hours, ETH fell back to around $1,800, and the total market value of crypto fell by nearly 4%.

Arthur Hayes, co-founder of BitMEX and a well-known figure in the crypto field, seems to be fulfilling his previous predictions. He once predicted that Bitcoin could fall to $75,000, and as market sentiment deteriorates, this prediction is becoming more and more credible.

In his latest tweet, Hayes reiterated that Bitcoin could fall further to $75,000, and warned that if it enters this range, the market will fluctuate violently. He pointed out that the open interest of options contracts near $75,000 has turned red, indicating that market sentiment is extremely pessimistic.

Trump's few words overturned the market, and the shadow of the US recession loomed

U.S. Treasury Secretary Scott Bessent said in an interview with CNBC on Friday that the US economy may go through a detoxification period as the new government cuts government spending.

Trump also responded to the possibility of a recession in an interview with Fox News broadcast on Sunday, saying that the economy is in a transition period.

Trump said: I have to build a strong country, you can't just focus on the stock market.

Goldman Sachs has recently significantly lowered its economic growth expectations due to the potential impact of tariffs, further exacerbating the market's pessimism about the US economic outlook. Data from the New York Federal Reserve showed that the 1-year inflation expectation in February was 3.13%, and the expectation of a worsening financial situation in the next year was the strongest since November 2023.

Sam Stovall, chief investment strategist at CFRA Research, told CNBC: We are in the throes of an artificial adjustment, and I say artificial adjustment because it is actually a response to the new government's tariff plan or at least the threat of tariffs, and what impact this will have on the economy.

Institutional analysis points out that if the recession concerns caused by the trade war come true, the Federal Reserve may begin a series of rapid interest rate cuts in June. The futures market has bet on a 25 basis point rate cut in June, July and October.

Tim Duy, chief U.S. economist at SGH Macro Advisors, warned that if the labor or financial market slips, the Federal Reserve will face dual risks: both dealing with inflation and resisting Trump's pressure to cut interest rates. However, whether the rate cut can save market confidence remains unknown.

Analyst: Bitcoin needs to experience a mini recession before it rebounds

Institutional investors are withdrawing from the crypto market, and crypto investment products have seen net outflows for the fourth consecutive week. According to CoinShares, crypto funds saw outflows of $867 million last week, bringing total outflows to $4.75 billion in four weeks. Most of the bearish sentiment came from the United States, where investors withdrew $922 million last week.

Zach Burks, CEO of NFT market Mintology, said Bitcoin could fall to $72,000 due to inflation concerns and Bitcoin's waning appeal as a Trump deal. He noted: Many investors are withdrawing from Bitcoin, which is the first time since Trump took office that it is considered a high-risk asset.

Burks believes that Bitcoin's failure to decouple from U.S. stocks has made it lose its function as a store of value. Instead, investors are turning to traditional safe-haven assets such as gold. He predicts that although Bitcoin may rise back to $110,000 this year, the market must first survive this mini-recession caused by Trump's policies.

Gregory Daco, an economist at EY, told CNN that the uncertainty and confusion of Trump's policies do not help the overall economic situation. He said: The current situation is that the policy is unclear, the policy intention is unclear, and the policy goal is unclear. All these factors combined make investors feel uneasy because it is unclear where the policy will eventually go.

So, in such an environment, Don’t Fight it, Float with It, before the storm comes, the real wisdom may not be to fight against the current, but to choose to drift safely with the trend and accumulate strength.