Source: Unchained
Podcast guest: BitMEX co-founder, Maelstrom CIO Arthur Hayes
Compiled by: BitpushNews
Abstract: In this podcast, Arthur Hayes discussed Trumps tariff policy and how Bitcoin will benefit from the global liquidity easing policy. He believes that Ethereum is the most undervalued mainstream L1 and will return to its historical peak before SOL. He is cautiously bullish on SOL and discussed his views on USDC issuer Circles application for an IPO.
The following is a summary of the interview:
Host: What do you think of Trumps tariff policy? Who will be the winners and losers in this tariff war?
Arthur Hayes: First of all, I would abandon the moral judgment of economic policies and focus on adapting to the situation and making profits from it. The good and bad of the problem are always relative. It is better to adjust the portfolio than to be emotional.
If Trump really wants to reduce the trillion-dollar annual trade deficit to zero and prove to his supporters that his policies are effective, then the current measures are completely reasonable.
But the other side of the coin is: when countries like Japan earn dollars through exports, in order to maintain the undervaluation of their currencies, they will not convert dollars back to their own currencies, but will buy U.S. financial assets (mainly U.S. bonds and stocks). This is exactly why the U.S. market has outperformed the world in the past 20-30 years, and it is also the key to the fact that the U.S. bond yields are still the same as 30 years ago after the debt size has increased 7 times.
Trump is trying to break this cycle: he tells Americans I will bring back good jobs (especially for those without a college degree), but the price is that foreign financing of the US government and stock market will be reduced - because they earn less in dollars. It is essentially a simple equation: the current account balance and the financial account balance increase and decrease at the same time.
As for judging good or bad? It is completely reasonable from the perspective of Trumps policy logic. But the key is: his voter base is mainly blue-collar workers who have not received higher education; Democratic supporters are more highly educated and wealthy groups with financial assets. In the past 40 years of globalization, the former has suffered due to industrial relocation, while the latter has benefited from corporate profits and stock market increases. The two worldviews are destined to be in opposition, and Trump is fulfilling his promise to his base.
Moderator: You seem to avoid value judgments. As an American, do you personally agree with Trumps policy goals?
Hayes: It depends on who you want to please. Data shows that more than 50% of people with an annual income of more than $100,000 voted for Harris; low-income groups are more likely to support Trump.
University degree is the core dividing line: those with higher education work in knowledge-based jobs (technology/finance/law, etc.); those with lower education traditionally work in manufacturing.
The reality in the United States over the past 40 years is that companies move factories to foreign countries to lower wage costs → profit growth → stock buybacks → shareholders benefit. However, American manufacturing workers have become victims of globalization. Trump speaks for the latter, while the Democratic Party protects the interests of the former. There is no absolute right or wrong, only the game of demands of different groups.
Host: You once predicted that the Federal Reserve would not tighten monetary policy due to tariffs. Do you still maintain this judgment?
Hayes: I discussed the phenomenon of fiscal dominance in detail in my BBC article - the Fed is essentially a government financing tool. Former Fed Chairman Burns famous speech in Yugoslavia in 1979 went straight to the point: when society believes that the government should solve all problems (which will inevitably be accompanied by fiscal expansion), the central banks anti-inflation responsibility will give way to keeping government financing costs under control.
Powell is in the same dilemma: despite strong US economic data (GDP growth above trend, historically low unemployment), he abnormally slowed QT and cut interest rates in September/December last year. The root cause is the $36 trillion debt and its exponentially growing interest expenses. When rigid US debt buyers such as Japan reduce their dollar income due to tariffs, the Fed must take over - Powell has recently made it clear:
The scale of QT will be reduced; considering using the funds from the maturity of MBS to purchase US Treasuries; saying that the impact of tariff inflation is temporary (repeating the mistakes of 2022).
This fully exposes his true position: to ensure that the Treasury Department obtains cheap financing. Trumps so-called reducing the deficit rate from 7% to 3% is not real tightening at all, but diluting debt through nominal GDP growth - Bitcoin will rise in tandem with gold in this flood of fiat currencies.
Host: You previously predicted that Bitcoin would first break through 110,000 rather than fall below 76,500. Have you revised your view now?
Hayes: Maintain the original judgment. 76,500 is the low point in March last year, and 110,000 is the historical high point set when Trump took office on January 20. Because global liquidity is about to surge: the Federal Reserve/European Central Bank/Bank of Japan will be forced to release liquidity, and Bitcoin will benefit in both deflationary collapse and inflationary outbreak scenarios.
Host: You mentioned that Bitcoin may decouple from traditional markets. So what do you think will be the future price trend of Bitcoin?
Arthur Hayes: I think the price of Bitcoin could rebound in the coming months. I have predicted that Bitcoin will break through $110,000 and then could go all the way to $250,000. It all depends on global liquidity and the monetary policies of the Federal Reserve and other major economies.
Host: What do you think about what happened recently at Hyperliquid?
Arthur Hayes: Obviously, I think people need to realize that decentralization in many projects is just an ideal. Hyperliquids position on this is clear. While I dont know their technical details, this looks like centralized control. We have dealt with similar issues at BitMEX, where highly leveraged, low liquidity contracts were easily exploited. I think the developers of Hyperliquid should learn from the experience of other major exchanges (including those that copied the BitMEX model). They may need to review their margin policies and liquidation mechanisms more carefully to avoid similar incidents from happening again. This kind of centralized behavior in a seemingly decentralized project is not new, BitMEX and other major exchanges have faced similar problems in the past.
Secondly, most people probably care more about price, speed, and fees. As long as the trading experience is good and profitable, they don’t care too much about how the underlying works. From a user’s perspective, as long as they are compensated and can continue to trade, they may not care.
This is really the decentralization dilemma. Investors and traders need to weigh the risks of using decentralized platforms, including the potential for exploitation by bad actors and the regulatory pressure they may face. Platform teams also need to consider these issues, but the lines they draw may not always be completely consistent. This remains an issue of ongoing debate, with no clear right or wrong answer.
Host: So what do you think about Circle’s upcoming IPO?
Arthur Hayes: Honestly, I don’t think Circle’s IPO is worth investing in. Circle’s business model relies on net profit margins, and its customer base already has many competitors, especially Tether.
Furthermore, Circle is heavily dependent on Coinbase as a distribution channel. They are completely dependent on Coinbases distribution arm to survive, as most of their net interest income goes to Coinbase, which then distributes it. So why would I buy Circles IPO? If you want to own the leader, just buy Coinbase.
Host: What do you think of the current investment opportunities in the crypto industry? What projects are you currently focusing on?
Arthur Hayes: Our investment strategy is to strictly control prices and not blindly follow the trend of investing in popular projects. Many projects in the market are overvalued, especially those in the early stages, so we are more inclined to invest in projects that have been tested by the market and have fallen to a very low level but are still of high quality.
Moderator: What do you think about Ethereum and Solana? Which one do you think will have a better future?
Arthur Hayes: From a risk-return perspective, I think Ethereum has more potential.
Although Ethereum is currently viewed by many as an unpopular asset, it is precisely this “hated” asset that usually performs best when the market rebounds. Although Solana has performed well in the recent market, its future development faces some uncertainty.
I always adhere to the principle of reverse investment - looking for the most despised assets in the new cycle. Ethereum is a typical example. As the most questioned mainstream L1, it has the potential to return to its historical high of nearly $5,000 in 2021 before Solana. This divergence between market sentiment and value creates an excellent opportunity.
So if you ask me which one to invest in, I prefer Ethereum. Ethereums position in the entire crypto ecosystem is still not to be ignored. Especially in decentralized applications (dApp) and smart contracts, Ethereum is still the most competitive basic chain. As long as it can cope with the scalability problem, it still has great growth potential.
Host: Back to Bitcoin, you once mentioned that Bitcoin might reach $250,000. When do you think this might happen?
Arthur Hayes: It depends on global monetary policy. I think if the worlds major economies continue to expand their money supply, financial markets will be filled with abundant fiat liquidity. In this way, Bitcoin, as an anti-inflation asset, will usher in a new round of rise. Therefore, $250,000 is not an impossible goal, especially around 2025.
