By Trista Kelley
Compiled by: TechFlow
What is Trump's impact on cryptocurrencies?
Arthur Hayes discussed this, as well as Gary Gensler and Wall Street’s penetration of cryptocurrencies, in an interview.
He also mentioned reasons why the price of Bitcoin could reach $1 million.
Arthur Hayes’ first job was on the trading floor of Deutsche Bank in Hong Kong. The day he started, in September 2008, Lehman Brothers filed for bankruptcy. He was just 22.
The days of high-octane trading and million-dollar bonuses came to an abrupt end.
Young traders like Hayes are being shunned by an onslaught of regulation, compliance departments and a stuffy office culture.
Then he discovered cryptocurrency.
“When I read the Bitcoin white paper, it resonated with real philosophies of mine, like, the corrupt banking system and how ridiculous it is,” he told DL News.
Fast forward a decade — a decade that saw him co-found the BitMEX cryptocurrency exchange, reach billionaire status, and plead guilty and receive probation in the United States — and the crypto industry is beginning to resemble the banking industry he left behind.
“It still has the energy of a diverse group of people from all over the world” - Arthur Hayes
Today, financial giants including BlackRock and Franklin Templeton provide retail investors with cheap and secure access to crypto investments.
Fidelity wants to include Bitcoin in US pension funds.
Join the community to get our latest stories and updates
Hayes believes the industry is still the same old thing.
“It still has the energy of a diverse group of people from around the world, from finance backgrounds, from technology backgrounds. They want something different,” Hayes said last week in his office in Singapore.
“They want an unlimited return, albeit one that is extremely volatile and can be lost quickly if you’re not careful. But at least there’s a chance of generating extremely high product usage or extremely high wealth.”
As an OG of cryptocurrency, Hayes has widespread credibility.
He has also become one of the most influential and widely followed market commentators, covering cryptocurrencies and beyond.
Before Monday’s market crash, Hayes chatted with DL News to discuss the election, the financial industry’s acceptance of cryptocurrencies, and his thoughts on the price of Bitcoin.
About the election
AH: They think Trump is right and therefore he will move things faster. Trump or Harris, it doesn't matter.
DLN: Why?
AH: Yes, cryptocurrencies have donated a lot of money. But I don’t think they’ve donated enough to surpass JPMorgan, Morgan Stanley, Citibank, and Goldman Sachs.
If you think about the people who work in these institutions, they are actually people from financial institutions.
So it would be great if Trump was elected and was able to implement these policies, but I think he would probably face similar problems as he did in his first term.
You can make all these wonderful promises and try to implement policies, but if all parts of the government are against them, then it won’t work.
On Bitcoin and Monetary Policy
AH: Whether it's a Trump administration or a Harris administration, they're going to print money. They're going to do it in different ways, but money is going to be printed.
Therefore, your cryptocurrency will go up — there may be a lot of volatility along the way, but at the end of the day, we know where it’s going.
About SEC Chairman Gary Gensler
DLN: SEC Chairman Gary Gensler seems to be a villain in the industry. Do you share that view?
AH: People confuse the symptom with the problem. You could listen to his lectures, and he was a very smart man. But when he was in government, he was incompetent.
It's just a political problem. You can replace him with someone else, but it won't change much. Gary Gensler is not the problem, and neither is the SEC.
If the regulations you’re unhappy with are still in place and your elected representatives choose to focus on other matters rather than creating a framework for cryptocurrencies, firing Gary Gensler isn’t going to change the status quo.
People are mad at Gary Gensler, but he’s actually irrelevant.
Plans for Bitcoin Reserves
AH: I think that would be nearly impossible to achieve even if Trump were elected.
You need a critical mass of people to vote for this if it's going to have a negative impact on the U.S. Treasury or the Federal Reserve or maintain visibility in the U.S. Treasury market.
DLN: Do you think this is a good idea, even if it won’t come to fruition?
AH: Oh, that's a great idea. The US should weaken the dollar and eventually buy Bitcoin and gold, which would solve a lot of problems.
They will weaken the dollar, and Bitcoin and gold will rise.
Do I think the US government will actively try to buy Bitcoin? Highly doubtful. They will buy gold first, not Bitcoin.
But it's the same deal, and that's our motivation for doing this.
On BlackRock’s role in cryptocurrencies
AH: The whole point of cryptocurrency is that there are no barriers to entry.
BlackRock should be able to use Bitcoin, and people without financial services in the Philippines should be able to use cryptocurrencies.
Are the incentive structures strong enough? Do the game theory and mechanisms behind how blockchains work ensure that centralization doesn’t occur? If it does, are there consequences?
I’ve written a bit about whether the influence of passive investing will seep into cryptocurrencies and whether this will lead to them controlling all Bitcoins, thus ossifying the network.
In theory, this could happen. But it's still an open playing field.
If you own a BlackRock product, you own a derivative of a cryptocurrency, not the cryptocurrency itself. BlackRock owns your cryptocurrency.
So the BlackRock product is an attractive product for people because it’s simple, but it’s also not a cryptocurrency.
About the price of Bitcoin
AH: The price of Bitcoin in this cycle is going to be very, very high. Hundreds of thousands of dollars, maybe even $1 million.
There is a lot of debt that needs to be rolled over. We are entering a period of significant change in the global monetary system.
We don’t know what it will look like, but the people who have gained the most over the past 80 years are going to be very resistant to change.
