Arthur Hayes predicts that the Fed will cut interest rates by 50 basis points, following the trends in the crypto market, Decentralized Finance, and ENA.

Crypto Assets billionaire Arthur Hayes revealed his predictions for the crypto market, Decentralized Finance, and Ethena (ENA) after the Fed cut rates by 50 basis points on Tuesday. Despite the fall in Bitcoin and the global crypto market dropping below $4 trillion, DeFi has finally begun to gain adoption.

Hayes predicts that the Fed will cut interest rates by 50 basis points

Arthur Hayes predicted on September 9 that the sharp decline in the U.S. 2-year Treasury yield and weak labor employment data suggest that the Fed will implement a larger rate cut in September. Additionally, after the U.S. non-farm payrolls data was released at 22,000 (far below the expected 75,000), the U.S. 10-year Treasury yield significantly declined. In the context of stubborn inflation, the weak labor market has raised the possibility of the Fed cutting rates three times this year.

The CME FedWatch tool shows that the possibility of the FOMC lowering interest rates by 25 basis points this month exceeds 88%. In addition, traders expect the Fed to lower rates a total of 75 basis points this year, with the likelihood of a 25 basis point cut in December rising to 70%.

Price Predictions for the Crypto Market, Decentralized Finance, and ENA

Arthur Hayes predicts that after the Fed lowers interest rates, trillions of dollars in capital will flow into the crypto market. He believes that a 50 basis point cut or dovish statements from Fed Chairman Jerome Powell could result in billions of dollars in capital inflows.

He pointed out that after the interest rate cuts, trillions of dollars in money market funds (MMF) will seek higher yields. As the bridge between the crypto market and traditional finance becomes increasingly solid, Decentralized Finance will witness a massive influx of these funds.

Hayes specifically mentioned the USDE (sUSDe) staking on Ethena, which offers a 7% yield, and he believes it will attract significant inflows from institutions. These inflows will drive the supply of Ethena's synthetic dollar USDe from the current $12.98 billion to over $20 billion. Furthermore, he claims that Ethena (ENA) will experience a massive rebound, with prices expected to exceed $1.50 in the coming months.

At the time of writing the report, the ENA price was trading at $0.792, having risen more than 4% in the past 24 hours. Its trading volume increased by nearly 75% in the last 24 hours, indicating strong interest from traders in this asset. Arthur Hayes himself spent 1.02 million USDC in the past few hours to purchase 1.34 million ENA, bringing his total holdings to 4.45 million ENA, worth $3.48 million.

Conclusion

Arthur Hayes boldly predicts a close connection between macroeconomic policies and the dynamics of the crypto market, painting a future picture where the DeFi market will see a massive influx of capital under the expectation of Fed interest rate cuts. His substantial personal investment in ENA also provides solid action support for his bullish statements. This once again proves that in the current global economic landscape, decisions in traditional financial markets (such as interest rate changes) are increasingly becoming key catalysts for driving the next major trend in the crypto assets space.