The Real Source of Crypto Volatility
Recently, Arthur Hayes, co-founder of BitMEX, explained that Bitcoin derivatives don't create market trends — they simply amplify the swings already present in either bullish or bearish movements. This mechanism highlights volatility but doesn't dictate the fundamental direction of prices.
No Hidden Market Forces
Hayes dismissed rumors of secret plots to manipulate crypto prices. He emphasized that every price drop reflects natural market dynamics rather than coordinated attacks. These corrections help reset the ecosystem organically.
Clearing Excessive Leverage
- Over-leveraged investors (often called 'tourist money') naturally get eliminated during sharp moves
- This self-cleansing process removes speculative excesses
- It prepares the ground for healthier price action
According to Hayes, the absence of bailouts allows markets to quickly purge speculative positions. This self-correcting mechanism makes crypto fundamentally different from traditional financial systems.
Looking Ahead: A New Bull Cycle Begins
Investors who survive market corrections tend to become more disciplined. Capital gradually returns with improved risk awareness. Hayes believes crypto has entered a new phase driven by real value, suggesting a long-term upward trajectory once stability returns.