Translated by | Wu Says Blockchain
In a recent exclusive interview on the podcast Alpha First, Arthur Hayes shared his bold predictions for the future of the cryptocurrency market. He believes that with the potential rise of the Trump administration, the US's loose monetary policy will lead to a depreciation of the dollar, which will in turn drive up the prices of Bitcoin and other crypto assets. He also discussed global inflation, the monetary policies of sovereign nations, and how to enable Bitcoin and other crypto assets like meme coins to benefit. He emphasized that investors need to stay vigilant during a bull market to avoid ignoring market risks due to greed. Furthermore, he looks ahead to future market trends and predicts that Bitcoin could reach a milestone of $250,000 by 2025.
Please note: The opinions of the guests do not represent Wu's opinions, and Wu does not endorse any products or tokens. Readers must strictly adhere to the laws and regulations of their location.
Listen to the full podcast (YouTube):
https://www.youtube.com/watch?v=xONEXGRcBMU
Trump's economic policies will lead to a depreciation of the dollar and benefit Bitcoin.
Dreamer: The election just ended a few weeks ago, and there are many fluctuations in market prices. What can we expect in the next 12 months? Do you have a vision to share with us? In the overall landscape of cryptocurrency predictions, what should we be paying attention to?
Arthur: From my perspective, the market's predictions are correct. They expect Trump and his new cabinet members to print a lot of money in the US. One of their campaign platforms is to attract manufacturing and industrial companies back to the US through a weak dollar policy. Then, they will inject a lot of funds through bank credit, increasing the credit in the US economy to promote production and raise wage levels. All of this will lead to inflation.
The ultimate losers are those who save in dollars or hold government bonds. Those who have fixed-supply assets like Bitcoin will perform very well. We are already seeing this trend, right?
So, I've charted some data comparing the total volume of bank credit in the US to Bitcoin's performance. Currently, Bitcoin is clearly leading. This indicates that if Trump comes to power, his plan is quite clear — to weaken the dollar, stimulate the market with credit, and get people back to work to restore America's productive capacity. I believe he will execute this plan.
Will Bitcoin reach $1 million?
Scott: There’s a follow-up question about Trump. You made a bold prediction that Bitcoin would reach $1 million if Trump came to power. Do you still think everything will develop as expected? Do you still have confidence?
Arthur: I'm confident but not sure if it will happen in the short term. In fact, this trend started when Trump was elected president in 2016. At that time, he pushed for a trade war against China, and the Democrats and the Biden administration continued this policy. So now, this confrontation has become deeply ingrained in American political culture.
The US has historically shifted most of its manufacturing and production capacity to China and Asia, which have gained a competitive advantage by weakening their currencies, affecting US workers. Therefore, the US must bring these industries back home. To achieve this, trillions of dollars in credit need to be allocated to businesses so they can make profits domestically.
Biden has passed measures such as the CHIPS Act, infrastructure construction act, and the Green New Deal, all of which require massive funding support. This trend will continue.
Global economic policies will drive inflation up and favor crypto assets.
Dreamer: People in the crypto space are usually the most disruptive group. There are many discussions worth having around Trump. From a domestic perspective, your views make sense and make many people feel optimistic. But if we look internationally, how will the election affect foreign policy, wars, and trade? For Asia, some policies could bring certain fears. Will these policies negatively impact the economy or cryptocurrency? Or should we not worry too much?
Arthur: I believe that essentially, every country is now implementing a 'national priority' policy. The US has proposed 'America First,' while China hopes to bring prosperity back to rural or low-income areas through the 'common prosperity' plan. As a result, the Chinese government has suppressed the real estate bubble and is now re-stimulating the economy through a loose monetary policy.
Japan is experiencing a return of funds, which will boost its economy, but it also needs more credit to prevent bank failures. Meanwhile, Europe is struggling because it has cut off cheap energy from Russia and turned to expensive energy imports from the US. But they still need to support businesses, so they will also implement stimulus policies.
So every country is working hard to take care of its own citizens, which means bringing back local industries and increasing demand for goods. This trend will drive global inflation up, further suppressing the long-term outlook for bond yields.
In such an environment, cryptocurrencies will perform well. Although the policies of various countries seem different, they are actually pursuing the same goal, which is to prioritize the needs of their citizens. This requires an increase in internal credit distribution and an expansion of supply to support production and create jobs. This global trend is a huge boon for Bitcoin and other crypto assets.
Will the rise of Bitcoin drive other crypto assets?
Dreamer: It looks like this is a great opportunity for cryptocurrencies, especially Bitcoin. But what about other cryptocurrencies? Do you think they will be affected by Bitcoin’s rise? Are you a Bitcoin maximalist who believes only Bitcoin has a future, and the rest won't follow? Or do you think other projects like Ethereum will have opportunities? For example, NFTs, meme coins, and DeFi, these trends have gone up and down. Will they also benefit from the market rise, or are you mainly focused on institutional investors, believing only Bitcoin will attract funds?
Arthur: I actually don't pay much attention to the movements of institutional investors because people always say they will come in, but they have their own complex investment logic and credit considerations, whether to buy or not. From the perspective of retail investors, when Bitcoin's price rises, Bitcoin is the most important asset for everyone. When my wealth in Bitcoin increases, I don't want to go back to fiat currency because it doesn't make sense, right? I also won't only invest in Bitcoin. I want to invest in other crypto assets with larger potential gains than Bitcoin.
What else can be done? We'll focus on meme coins, new Layer 1 blockchains, Layer 2 projects, NFTs, and the gaming sector, etc. Bitcoin leads the market, and then funds will gradually flow to other categories of assets. Because ultimately, the goal is to earn more cryptocurrencies, not to exchange back for fiat. I believe fiat currency will eventually go to zero.
Scott: Yes, I think everyone will try to make quick profits, and some may even become addicted to this rapid growth. After all, this is one of the fastest-growing asset classes. If people profit from Bitcoin, many won't turn back to fiat currency, but will shift to other crypto assets that still have potential. You also mentioned that meme coins in this cycle have surprised everyone, just like NFTs did in the last cycle. I heard you hold some meme coins; is this part of the market interesting to you? How have meme coins performed in this cycle, and can they easily reach billions in market cap?
Arthur: This is indeed interesting; I love it. This phenomenon is interesting and amusing, such as that meme coin squirrel, which went from zero to $2 billion in about nine days. Just because the US government executed a squirrel, it became a $2 billion meme coin, traded globally. This phenomenon showcases how quickly we can respond to hot topics in global culture and make it fun through meme coins. Now, everyone knows about this squirrel that was 'executed' by the US government or New York state, leading to a meme coin around it.
This is both interesting and reflects reality. There may also be a subculture that expresses some discontent with the government, such as the inflation policies they have adopted. This phenomenon has also made meme coins a rapidly spreading attention market.
The rapid rise of meme coins showcases the responsiveness of global culture.
Dreamer: We also have some existing meme coins like 'blue-chip' meme coins, such as the ones you just mentioned that are related to current events. I think these meme coins will have ups and downs, but we also have some meme coins that have stabilized, like Dogecoin. Some say it will rise to $1. Do you think that’s possible?
Arthur: I think it's possible. It's very interesting, especially when it comes to governmental efficiency departments or new 'Elon'-like figures, confirming certain things that become classic memes in themselves. I wish I had bought some back then because these memes are just too good and too interesting. Elon is an excellent meme creator, possibly one of the best meme creators in history. Although I have some doubts about his business model, he is undoubtedly a genius in meme art. So, Dogecoin could indeed reach $1.
However, I feel that when people start to realize how big the gap is between government propaganda and actual results, there will be a feeling of 'falling from grace.' People may reevaluate the significance of these memes and the messages they convey. This shift will be very interesting.
Advice for newcomers: Stay rational and cash out at the right time during a bull market.
Dreamer: There are now many technologies that make it easier to launch new Layer 1 blockchain projects or meme coins. I believe we will see more creativity pouring into this field, along with more trends toward specialization. Additionally, as you mentioned, the momentum brought by the elections is also very strong. If we look back at the past, such as the rise of DeFi and NFTs, and other trends that were once hyped, the excitement then was very similar. So, what lessons or cautionary tales are worth sharing? Especially for those experiencing a bull market for the first time, what would you advise them to pay attention to during this process? How to avoid falling into the same traps in this 'beautiful yet cruel world'?
Arthur: First of all, no one can profit from the market forever. Everyone knows that you can make money quickly in a bull market, but the key is how to preserve those gains. For example, the meme coins you hold now might not exist in a month or two. Their market cap could plummet from $200 million to $5 million, with such drastic changes. You can't predict these things.
Some statistics indicate that only about 0.01% of meme coins can exceed a market cap of $500 million, and most traders ultimately lose money. Many see huge gains on paper, yet they always hold on to the mentality of 'I can earn more,' eventually leading to the loss of wealth they already had.
So, if you've earned some life-changing money, take some of it out to cash in. The market will always have opportunities to come back. Maybe you can take a break for a while, reassess the market. Staying rational is very important.
Are there potential risks or catalysts in the market?
Scott: In this situation, people can easily experience a round of 'roller coaster' market fluctuations. As you mentioned, some assets might disappear in a month or two. Some people indeed made life-changing money in just a few days, like with the meme coin Peanut. But even coins that reach a market cap of $2 billion can crash quickly. So, your point is correct; cashing out at the right time is important, whether it's meme coins or Bitcoin; you need to gradually exit some positions. As you said, locking in profits won't lose money.
Dreamer: Are there any 'black swan events' or potential catalysts that could disrupt the market? Looking back over the past few years, such as the collapse of FTX or other unforeseen events, are there any trends or entities we need to keep an eye on? Under a new Trump administration, have the markets already cleared these uncertainties, becoming simpler for development?
Arthur: I think a lot has already been cleaned up. Many people suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna events. So, maybe Bitcoin has already risen to $100,000 by now (it could be this price when you release this interview). But in the long run, when traditional financial funds see the prices of cryptocurrencies rising, they will want to participate, for example, through venture capital.
Many venture capital firms have raised a lot of money, similar to the last cycle, and they need to find big companies or important projects to invest in. In the early stages of the market, these funds are usually allocated reasonably and have good uses. But as the bull market deepens, funds may flow into certain 'hot areas' because investors have to invest to get returns. In this case, we may see some business models built on the assumption of continuously rising prices, leading to accumulated risks and ultimately market imbalances.
I don't know specifically which sector will experience this situation yet, but we haven't reached the 'overheated' stage. Especially when traditional financial capital enters, overinvestment may occur in certain areas, which is where investors need to be cautious to avoid a 'shakeout' when market prices diverge from reality.
Dreamer: Yes, when I hear you speak, I think that when people have many successful trades, they become bored and crave the feeling of making quick profits again. Currently, there are many Bitcoin layer two protocols announcing yield plans, but where do these yields come from? We don't want to repeat the mistakes of the past, promising high yields without a solid foundation. Others might seek more trends to pursue high returns, which will gradually increase risks. So, for those who have experienced the last bull market, I hope they can learn lessons, and for newcomers, I hope they can learn from the experiences of others.
Casual talk about skiing.
This interview is very exciting. We really appreciate your time. There is an IFC event tonight — a credit showdown; I wonder if you and others have time to participate. This is a global event, and we would love to have the opportunity to invite you to participate in the future. I believe you would enjoy this kind of event and meeting influential figures in the crypto space. Now I will hand the mic over to Scott to conclude this interview.
Scott: Yes, we really appreciate your time, sitting down with us to answer these questions. It would be great to see you at the IFC. One last light question: when you're not doing cryptocurrency-related things, what do you do? What are your hobbies? How do you relax or detach from this work? For example, are you a food enthusiast? Do you seek out new restaurants? Or are there other ways that keep you motivated?
Arthur: I really enjoy skiing. So I spend three to four months a year on the mountains, immersed in the snow. During the ski season, I ski eight hours a day. Aside from exercising and enjoying outdoor activities, I hardly do anything else. It makes me very happy.
Scott: What is your favorite ski destination?
Arthur: Niseko in Japan. Their powder snow is amazing, dry and light. It snows there every year from January to February; it's simply breathtaking.
Scott: So, you are preparing now? Adjusting your state?
Arthur: Yes, I'm preparing for skiing. However, the only downside of Japan's ski resorts is that the slopes aren't steep enough; there aren't those very dramatic steep runs.
Dreamer: The ski resorts in Salt Lake City have a lake effect. I live in Singapore now, but I used to live in the US and often went skiing, though I'm a snowboarder.
Scott: Me too! Although I still ski, I prefer snowboarding. Some places are suitable for snowboarding.
Dreamer: Yes, some places are very suitable. You won't encounter snowboarders 'trampling' your tracks on the slopes.
Scott: That's really great! I haven't skied in a few years, but it's a hobby I've always wanted to pick up again. I'm from the Northeast United States, grew up in New Jersey and New York, and could easily go skiing in Vermont. However, I've lived in Houston for the past decade, so skiing isn't as convenient anymore; it’s not just a matter of packing up and driving a few hours to get there.
Scott: I hope you have fun in the coming time. I really want to go to Japan to experience the joy of skiing; I hadn't realized there were such great conditions for skiing there. I must try it sometime in the future.
Predictions for Bitcoin’s price at the end of the year and in 2025.
Scott: By the way, let me ask a specific question. What do you think the price of Bitcoin will be at the end of this year and around this time next year?
Arthur: I believe Bitcoin will reach $100,000 by the end of this year, and by the end of 2025, it could reach $250,000.
Scott: Did you hear that? This is the first prediction announced by Alpha First: Bitcoin's price will reach $100,000 by the end of the year and could reach $250,000 a year later. Perhaps we have the opportunity to go to DevCon and other events next year to validate this prediction again. I hope by then it will be not just $250,000 but even higher.
