BitMEX founder Arthur Hayes has issued another warning, as many hedge funds are earning the spread by going Longing IBIT while Short CME futures. But as Bitcoin has fallen, the difference between the two has narrowed, and the hedge funds will unwind their positions and take profits during US time, which will quickly bring Bitcoin close to his target price of $70,000!

#Bitcoin goblin town incoming:
Lots of $IBIT holders are hedge funds that went Longing ETF Short CME future to earn a yield greater than where they fund, short term US treasuries.

If that basis drops as $BTC falls, then these funds will sell $IBIT and buy back CME futures.

These… pic.twitter.com/3PskTxrBPR

— Arthur Hayes (@CryptoHayes) February 24, 2025

Hedge funds taking profits, Bitcoin to plummet to $70,000

In an interview earlier this month, BitMEX founder Arthur Hayes said that with the technological breakthrough of Chinese AI company DeepSeek, the return of US President Donald Trump, and tightening global liquidity, the tech market and crypto market are facing new challenges. He also pointed out that the Trump administration is preparing to print more money and reduce regulation to reshape the US economy and financial market, and Bitcoin (BTC) could potentially retrace to $75,000 before starting a new uptrend.

(Bitcoin plunges to $75,000? Arthur Hayes talks about the Fed and Trump's conflicting policies shaking the market, and DeepSeek's impact on the US AI hegemon)

He tweeted today that many IBIT (BlackRock Bitcoin Spot ETF) holders are hedge funds, who have gone Longing the ETF while Short CME futures to earn a yield higher than short-term US Treasuries. But now the spread has narrowed as Bitcoin has fallen, and these funds will sell IBIT and buy back CME futures to take profits.

Arthur Hayes believes these hedge funds will unwind their positions and take profits during US time, and he thinks this will quickly bring Bitcoin close to his target price of $70,000!

Bitcoin plummets, lowest at 90K this morning

Bitcoin has plunged from last night's $96,000 to a low of $90,912 this morning, a drop of nearly 4% in 24 hours. Bitcoin has broken below the neckline of a four-month pattern, and a 50% retracement from the high of $109,588 to $70,000 also seems technically reasonable.

Arthur Hayes accurately predicted last year-end that the crypto market would experience a painful decline around January 20, 2025, the inauguration day of President Trump. Whether this prediction will come true is also worth watching for crypto friends.