Arthur Hayes, a co-founder and former CEO of crypto exchange BitMEX and the chief investment officer expressed that Bitcoin will most likely face selling pressure before and after Bitcoin’s mining-reward halving which is scheduled for April 20.

According to “Heatwave”, Hayes spelled out the narrative that halving can be positive for presumed crypto prices is “well entrenched.”

In cryptocurrency, a correction denotes a price decline of at least 10%. The bullish outlook is supported by historical data indicating significant multi-month surges in Bitcoin’s value following its halving event, which reduces the rate of supply expansion by 50% every four years, now dropping per-block issuance to 3.125 BTC.

Arthur Hayes, CEO of a major cryptocurrency exchange, highlighted concerns over the upcoming U.S. tax deadline of April 15th, coinciding with the Federal Reserve’s tightening policies. This convergence could drain dollar liquidity from the market, potentially triggering a widespread sell-off of crypto assets around the halving event.

Tax payments typically reduce liquidity in the financial system as individuals withdraw funds to meet their obligations, causing the dollar to appreciate against other currencies.

This, in turn, can lead to higher interest expenses for borrowers with dollar-denominated loans, prompting a retreat from risk assets like cryptocurrencies.

Hayes emphasized the significance of the Treasury General Account (TGA), which is expected to see a substantial increase in post-tax payments. This surge in the TGA balance further exacerbates the liquidity squeeze. He cautioned investors to exercise caution from April 15th to May 1st, anticipating a challenging period for risky assets.

Looking ahead, Hayes predicts that Treasury Secretary Janet Yellen will deplete the TGA after May 1st, potentially providing a positive catalyst for risk assets leading up to the U.S. presidential election in November. This expectation hints at a bullish outlook beyond the immediate liquidity concerns.

Also Read: Bitcoin Halving Could be a ‘Sell-the-news’ Trend for Months