Former BitMEX cryptocurrency exchange head Arthur Hayes has released his new essay titled The BBC, in which he examines the pressure on U.S. Federal Reserve Chair Jerome Powell from new Treasury Secretary Scott Bessen. Hayes attempts to analyze how these events may impact a return to quantitative easing.
This is reported by Finway
“President Donald Trump cannot fulfill his economic promises, particularly regarding industrialization and job growth, without cheap debt. And the only way to keep rates at a level acceptable to the Treasury is through monetary issuance.”
According to Hayes, a change in the Fed’s monetary policy will lead to an increase in fiat liquidity, which in turn will create favorable conditions for a new rise in cryptocurrencies. He predicts that Bitcoin could reach $250,000 by the end of 2025.
Key Themes of the Essay
In his essay, Hayes discusses several key aspects:
- Trump’s fulfillment of promises regarding economic growth.
- The importance of the Treasury Secretary’s position in shaping economic policy.
- The arithmetic of dollar liquidity and its impact on the markets.
- Lessons from the 2008 financial crisis.
- Trading strategy in a liquidity growth environment.
Hayes emphasizes that traders are interested not in whether the decisions are correct, but in whether fiat liquidity will increase. Using charts, he demonstrates how the U.S. balance of payments has changed over the past decades, particularly due to the devaluation of the yuan and China’s policies that have affected the economic situation in the U.S.
Forecasts and Investment Strategy
Hayes actively analyzes the future of cryptocurrencies, noting that the increase in market liquidity could positively affect Bitcoin prices. However, he also highlights the risks associated with a potential deflationary collapse.
The team at investment firm Maelstrom adopts a cautious strategy:
- does not use leverage;
- buys Bitcoin and altcoins in small batches;
- plans purchases based on market conditions and forecasts.
Hayes believes that cryptocurrencies, particularly Bitcoin, have significant growth potential amid changes in U.S. monetary policy.