Inflation, War, and Bitcoin: Arthur Hayes’ Take on the Current Financial Landscape
In his latest blog post, “The Periphery,” Arthur Hayes, the former CEO of crypto exchange BitMEX, discusses Bitcoin’s potential in the light of current economic conditions and offers a positive perspective on its future.
Amidst the backdrop of the U.S. being increasingly involved in two new wars and facing inflationary pressures, Hayes believes Bitcoin and gold stand to benefit.
The U.S. Federal Reserve’s decision to halt interest rate hikes, combined with the potential for a “bear steepener” in the economy, provides context for his views. Hayes remarks, “The structural hedging needs of banks and the borrowing needs of the US war machine reflexively feed on one another in the US Treasury market.”
Alternative Investments: Gold and Bitcoin
Hayes argues that if long-term U.S. Treasury bonds cease to provide a safety net for investors, there’s a likelihood that funds will pivot towards assets like gold and, more importantly, Bitcoin. This is especially probable if there are heightened fears of “global wartime inflation.”
The recent market dynamics support Hayes’ observations. Following U.S. President Joe Biden’s address regarding the wars in Ukraine and Israel, Bitcoin, in tandem with gold, experienced an upswing.
Conversely, there was a noticeable selloff in long-end US Treasuries. Hayes emphasizes this isn’t just mere speculation related to ETF approvals but rather a reflection of Bitcoin anticipating an inflationary global scenario due to potential war escalations.
Bitcoin $1m and a Critical Look at the U.S. Treasury Market
Arthur Hayes, known for his foresight regarding global economic shifts post-COVID, and has always been bullish on Bitcoin long term. He concludes his post, saying the time is ripe to invest in Bitcoin, and critiques the U.S. Treasury market’s transparency, suggesting it might not be as “free” as portrayed.
He states, “Once everyone realises the game we are playing, the Bitcoin and crypto bull market will be in full swing. This is the trigger, and it’s time to start rotating out of short-term US Treasury bills and into crypto.”
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