{"id":21733,"date":"2025-03-04T17:56:07","date_gmt":"2025-03-04T15:56:07","guid":{"rendered":"https:\/\/forklog.com\/en\/arthur-hayes-on-how-bitcoin-could-reach-1m\/"},"modified":"2025-03-04T17:56:07","modified_gmt":"2025-03-04T15:56:07","slug":"arthur-hayes-on-how-bitcoin-could-reach-1m","status":"publish","type":"post","link":"https:\/\/u1f987.com\/en\/arthur-hayes-on-how-bitcoin-could-reach-1m\/","title":{"rendered":"Arthur Hayes on how bitcoin could reach $1m"},"content":{"rendered":"<div class=\"wp-block-text-wrappers-keypoints article_keypoints\">\n<ul class=\"wp-block-list\">\n<li>Bitcoin could drop to $70,000 if stock markets fall by 20-30%.<\/li>\n<li>The leading cryptocurrency could rise tenfold on the back of Federal Reserve stimulus.<\/li>\n<li>Donald Trump\u2019s policies could trigger a recession and force the Fed to pivot to support the economy.<\/li>\n<\/ul>\n<\/div>\n<p>The first cryptocurrency remains in a bull run with a $1m target and, in the worst case, further correction to $70,000, <a href=\"https:\/\/cryptohayes.substack.com\/p\/kiss-of-death\">said<\/a> former BitMEX chief Arthur Hayes.<\/p>\n<p>In a new essay, \u201cKiss of Death\u201d, the analyst viewed digital gold through the lens of public debt and ways to reduce it.<\/p>\n<p>He called the unfolding melodrama \u201cDays of Our Emperor\u201d ruinous, questioning the ability of the \u201creal-estate showman\u201d who became president to finance his political goals.<\/p>\n<p>Hayes is convinced that Trump is ready to tackle economic problems by ramping up borrowing.<\/p>\n<p>In that context, the interaction between the US Treasury and the <span data-descr=\"United States Federal Reserve System\" class=\"old_tooltip\">the Fed<\/span> matters: increasing the quantity of money\/credit (\u201cthe printing press\u201d) and lowering its cost (interest rates).<\/p>\n<p>The former BitMEX CEO calls Fed chair Jerome Powell a turncoat, arguing that he \u201cdefected to the Democrats\u201d by cutting rates in September 2024\u2014when it was not needed\u2014to boost Kamala Harris\u2019s election chances. After the Republican\u2019s victory, the Fed chair pivoted to a hard fight against inflation, he says.<\/p>\n<p>In Hayes\u2019s view, restoring America\u2019s \u201cfinancial health\u201d will be hampered because Powell and US Treasury Secretary Scott Bessent \u201cserve different masters\u201d.<\/p>\n<p>The latter has officially stated the need to lengthen the average maturity of <span data-descr=\"US government bonds\" class=\"old_tooltip\">US Treasuries<\/span> to exit the debt crisis. For investors, the point is that Washington will avoid default by cutting the net present value of obligations.<\/p>\n<p>Powell and the Fed, for their part, control the amount and price of credit via a range of tools. Hayes deems it a non-trivial task for Trump to persuade Powell to print money and cut rates while preserving the central bank\u2019s anti-inflation mandate.<\/p>\n<h2 class=\"wp-block-heading\"><strong>Trump\u2019s plan<\/strong><\/h2>\n<p>The \u201cEmperor\u201d could \u201cmaneuver\u201d Powell by inducing a recession\u2014or convincing markets one is coming. In that scenario the Fed chair would cut rates, end<a href=\"https:\/\/en.wikipedia.org\/wiki\/Quantitative_tightening\" title=\"\"> quantitative tightening (QT)<\/a>, restart <a href=\"https:\/\/ru.wikipedia.org\/wiki\/%D0%9A%D0%BE%D0%BB%D0%B8%D1%87%D0%B5%D1%81%D1%82%D0%B2%D0%B5%D0%BD%D0%BD%D0%BE%D0%B5_%D1%81%D0%BC%D1%8F%D0%B3%D1%87%D0%B5%D0%BD%D0%B8%D0%B5\" title=\"\">quantitative easing (QE)<\/a> and\/or suspend the supplementary leverage ratio for banks as it applies to US Treasuries.<\/p>\n<p>How could Trump unilaterally trigger a recession? Hayes sees Elon Musk\u2019s Department of Government Efficiency (DOGE) as the instrument. The latter could curb government outlays and, via the multiplier, produce negative GDP growth.<\/p>\n<p>The agency could control government spending by stopping fraudulent payments and replacing civil servants with computers. Annual losses from waste and inefficiency amount to hundreds of billions of dollars, Hayes believes.<\/p>\n<p>Trump and DOGE fire thousands of civil servants, posing a threat to the labour market. In 2025, such a policy would cut the workforce by 400,000, the analyst noted.<\/p>\n<p>The economic effects are already being felt: jobless claims are rising, housing prices and consumer spending are falling. The market expects a recession.<\/p>\n<p>In this regard, Hayes wonders whether Powell will act proactively or react only once problems emerge. <\/p>\n<p>This year, $2.08 trillion of corporate and $10 trillion of Treasury debt must be rolled over. If the US faces a recession, extending bond maturities will be nearly impossible. The Fed would have to act to protect the financial system.<\/p>\n<h2 class=\"wp-block-heading\"><strong>The cost of crisis<\/strong><\/h2>\n<p>By Hayes\u2019s calculations, each 0.25% rate cut equates to $100 billion of liquidity. If rates were cut to zero from the current 4.25%, $1.7 trillion would flow into the financial system. Ending QT would release $60 billion a month, or $540 billion by year-end. <\/p>\n<p>Restarting QE and\/or relaxing the leverage ratio for banks would add another $0.5-$1 trillion.<\/p>\n<p>All told, Hayes expects $2.74-$3.24 trillion\u201470-80% of the Covid-era total, when stimulus from 2020 to 2022 reached $4 trillion.<\/p>\n<p>Back then, bitcoin rose 24-fold from its 2020 lows to its 2021 highs. Given the asset\u2019s larger capitalisation today, a 10x multiple is a fair expectation. Thus, by Hayes\u2019s reckoning, bitcoin would rise to about $1 million.<\/p>\n<p>Key premises:<\/p>\n<ul class=\"wp-block-list\">\n<li>Trump will finance the \u201cAmerica First\u201d strategy with debt;<\/li>\n<li>the US president will use DOGE to cut government spending and increase the likelihood of recession;<\/li>\n<li>the Fed will respond with measures that raise the quantity of money and lower its price.<\/li>\n<\/ul>\n<p>On a crypto reserve, the former BitMEX head remains sceptical. He argues that to have a real impact on prices the government would need to start buying digital assets. For that, Trump would need Republican help to raise the debt ceiling or revalue gold. The expert urged \u201cnot to rush this rally\u201d.<\/p>\n<h2 class=\"wp-block-heading\"><strong>Trading strategy<\/strong><\/h2>\n<p>According to Hayes, bitcoin\u2019s current dynamics flag a liquidity crunch despite lofty US stock indices. A Wall Street correction driven by recession fears is inevitable. In such conditions, the first cryptocurrency will ride a rollercoaster, he forecast.<\/p>\n<p>Panic\u2014and Fed action\u2014will not be long in coming. Digital gold will find a bottom and then rise as the fiat financial system descends into chaos.<\/p>\n<p>The downside in the worst case is the previous cycle\u2019s all-time high of $70,000. Hayes allows that this level may remain out of reach. That scenario would be possible if the S&amp;P 500 and Nasdaq 100 fell by 20-30% from their <span data-descr=\"all-time high\" class=\"old_tooltip\">ATH<\/span>.<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cRegardless, we will cautiously \u2018nibble at the bottom\u2019 without leverage in anticipation of a crisis in fiat financial markets, before bitcoin reaches $1,000,000,\u201d<\/em> the specialist concluded.<\/p>\n<\/blockquote>\n<p>In February, Hayes said the price of the first cryptocurrency could fall <a href=\"https:\/\/u1f987.com\/en\/news\/arthur-hayes-predicts-bitcoin-could-drop-to-70000-due-to-etf-outflows\">to $70,000<\/a> amid outflows from exchange-traded funds.<\/p>\n<p>Earlier, CryptoQuant CEO Ki Young Ju<a href=\"https:\/\/u1f987.com\/en\/news\/expert-identifies-target-of-bitcoins-current-correction\"> forecast<\/a> a prolonged consolidation in a wide range (for example, $75,000-100,000), as seen in early 2024 before prices returned to an upward trajectory.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Bitcoin could drop to $70,000 if stock markets fall by 20-30%. The leading cryptocurrency could rise tenfold on the back of Federal Reserve stimulus. Donald Trump\u2019s policies could trigger a recession and force the Fed to pivot to support the economy. The first cryptocurrency remains in a bull run with a $1m target and, in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":21732,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1193,1146,991,1217,1249,1224,1150],"class_list":["post-21733","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-arthur-hayes","tag-cryptocurrency-market-forecasts","tag-donald-trump","tag-elon-musk","tag-federal-reserve-system","tag-macroeconomics","tag-news-plus"],"aioseo_notices":[],"amp_enabled":true,"views":"62","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/21733","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/comments?post=21733"}],"version-history":[{"count":0,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/posts\/21733\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media\/21732"}],"wp:attachment":[{"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/media?parent=21733"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/categories?post=21733"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/u1f987.com\/en\/wp-json\/wp\/v2\/tags?post=21733"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}