Original text 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 dollar depreciation, subsequently driving up the prices of Bitcoin and other crypto assets. He also discussed global inflation, sovereign monetary policies, and how to benefit Bitcoin and other crypto assets like meme coins. He emphasized that investors need to stay alert during the bull market to avoid overlooking market risks due to greed. Additionally, he looked towards future market trends, predicting that Bitcoin could reach a milestone of $250,000 by 2025.
Please note: The views of the guests do not represent Wu Says' views, and Wu Says does not endorse any products or tokens. Readers should 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 dollar depreciation and benefit Bitcoin.
Dreamer: The election just ended a few weeks ago, and there have been many changes in market prices. What can we expect in the next 12 months? Do you have any visions to share with us? In the overall cryptocurrency prediction landscape, what should we pay attention to?
Arthur: From my perspective, the market's predictions are correct. They expect Trump and his new cabinet members to print a large amount of money in the US. One of their campaign agendas is to attract manufacturing and industrial businesses back to the US through a weak dollar policy. Then, they will inject a large amount of funds through bank credit, increasing the credit volume in the US economy to boost production and raise wage levels. All of these will lead to inflation.
The ultimate losers are those who save dollars or hold government bonds. Those with fixed-supply assets like Bitcoin will perform exceptionally well. We are already seeing this trend, right?
So, I plotted some data comparing the total amount of bank credit in the US with Bitcoin's performance. Currently, Bitcoin is clearly ahead. This indicates that if Trump comes to power, his plans are clear — to weaken the dollar, stimulate the market with credit, and get people back to work, restoring America's production capacity. I believe he will execute this plan.
Will Bitcoin reach $1 million?
Scott: A follow-up question about Trump. You made a bold prediction that if Trump comes to power, Bitcoin would reach $1 million. Do you still think everything will unfold as expected? Do you still have confidence?
Arthur: I am very confident, but I am not sure if it will be realized 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 Biden administration have continued this policy. So now, this confrontation has deeply penetrated American political culture.
The US has shifted most of its manufacturing and production capacity to China and Asia, where these countries have gained a competitive advantage by weakening their currencies, affecting American workers in the process. Therefore, the US must bring these industries back. To achieve this goal, trillions of dollars in credit need to be allocated to businesses so they can profit domestically.
Biden has passed measures like the CHIPS Act, the Infrastructure Bill, and the Green New Deal, all of which require substantial funding. This trend will continue.
Global economic policies will drive inflation up and benefit crypto assets.
Dreamer: People in the crypto space are often the most disruptive group. There’s a lot to discuss around Trump. From a domestic perspective, your viewpoint makes sense and gives a lot of people optimism. But looking internationally, how will the elections affect foreign policy, war, and trade? For Asia, some policies might bring about a certain fear. Will these policies have a negative impact on the economy or cryptocurrencies? Or should we not worry too much?
Arthur: I think fundamentally, every country is now pursuing a 'national priority' policy. The US has proposed 'America First,' while China hopes to bring prosperity back to rural areas or low-income groups through its 'common prosperity' plan. Therefore, the Chinese government has suppressed the real estate bubble and is now stimulating the economy again through monetary easing policies.
Japan is experiencing capital repatriation, which will boost its economy but also requires more credit to prevent bank bankruptcies. Europe, on the other hand, is in trouble because it has cut off cheap energy from Russia and turned to importing expensive energy from the US. But they still need to support businesses, so they will adopt stimulus policies.
So every country is trying to take care of its own citizens, which means restoring local industries and increasing demand for goods. This trend will push inflation up globally, further suppressing the long-term prospects of 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 allocation 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 up other crypto assets?
Dreamer: It seems like 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 in Bitcoin’s prospects while others won't follow? Or do you think other projects like Ethereum could have opportunities? For example, NFTs, meme coins, and DeFi, these trends have had their ups and downs. Will they also benefit from the market rise? Or are we mainly focusing on institutional investors who believe 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 enter, but they have their own complex investment logic and credit considerations; there are reasons for buying or not buying. From a retail investor's perspective, when Bitcoin's price rises, everyone's most important asset is Bitcoin. When my wealth in Bitcoin increases, I don't want to go back to fiat because it makes no sense, right? I also wouldn't just invest in Bitcoin. I want to invest in other crypto assets that have larger growth potential than Bitcoin.
What else can we do? We will 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 into other categories of assets. Because ultimately, the goal is to earn more cryptocurrency, not to exchange it back to fiat. I believe fiat will ultimately go to zero.
Scott: Yes, I believe everyone will try to profit quickly, even getting a bit 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 but will shift to other still-potential crypto assets. You also mentioned that the meme coins in this cycle have surprised everyone, just like the NFTs 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 rise to the scale of billions?
Arthur: This is indeed very interesting; I love it. This phenomenon is both fascinating and entertaining, like that meme coin squirrel, which went from zero to $2 billion in just about nine days. Just because the US government executed a squirrel, it became a $2 billion meme coin, traded globally. This phenomenon shows how quickly we react to hot topics in global culture and make it interesting through meme coins. Now, everyone knows about this squirrel that was 'executed' by the US government or New York state. Thus, a meme coin has formed around it.
This is both interesting and reflective of reality. There may also be a subculture of dissatisfaction with the government, such as their inflation policies. This phenomenon has also made meme coins a rapidly spreading attention market.
The rapid rise of meme coins demonstrates the responsiveness of global culture.
Dreamer: We still have some existing 'blue-chip' meme coins, like those you just mentioned that are related to current events. I think these meme coins will have fluctuations, 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 interesting, especially when it comes to government efficiency departments or new roles like “Elon,” who confirm certain things, which themselves become classic memes. I wish I had bought some back then because those memes are just too good and interesting. Elon is a very good 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 think there will be a feeling of 'falling from grace' when people start to realize how big the gap is between government propaganda and actual results. People may reassess the meaning of these memes and the messages they convey. This transition will be very interesting.
Advice for newcomers: Maintain rationality and cash out in a timely manner during the 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 specialization trends. Additionally, as you mentioned, the momentum brought by the elections is also very strong. If we look back at the past, for example, the rise of DeFi and NFTs, as well as other trends that were once hyped, the excitement at that time felt 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 can they avoid repeating mistakes in this 'beautiful yet brutal world'?
Arthur: First of all, no one can profit from the market forever. Everyone knows they can make quick money 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 can drop from $200 million to $5 million, and the volatility is so drastic. You can't predict these things.
Some statistics indicate that only about 0.01% of meme coins have a market value exceeding $500 million, and most traders end up losing money. Many see huge gains on paper, yet they always hold onto the mindset of 'I can earn more,' ultimately leading to the loss of wealth they already have.
So if you've earned some money that could change your life, then take out some to cash out. The market will always have opportunities to come back. Perhaps you could take a break, reassess the market. It's very important to stay rational.
Are there potential risks or catalysts in the market?
Scott: In this case, it's easy for people to go through a 'rollercoaster' of market volatility. As you mentioned, some assets could disappear in a month or two. Some people indeed made life-changing money in just a few days, like the meme coin Peanut. But even a coin with a market cap of $2 billion can crash quickly. So your point is correct; cashing out at the right time is necessary, whether it's meme coins or Bitcoin; you need to gradually exit some positions. As you said, taking profits means not losing money.
Dreamer: Are there any 'black swan events' or potential catalysts that could disrupt the market? Looking back over the past few years, like the collapse of FTX or other unforeseen events, are there any trends or entities we need to be vigilant about? Has the market cleared these uncertainties under a new Trump administration, making it simpler for development?
Arthur: I think a lot has already been cleared out. Many have suffered significant losses in the FTX, Genesis, Three Arrows, and Luna incidents. So, perhaps Bitcoin has already risen to $100,000 (maybe by the time you publish this interview, it will be at this price). But in the long run, when traditional financial funds see the price of cryptocurrencies rising, they will want to get involved, for instance, through venture capital.
Many venture capital firms have raised large amounts of money, similar to the last cycle, and they need to find large 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 gain returns. In such cases, we may see some business models built on the assumption of continuously rising prices, leading to risk accumulation and ultimately market imbalance.
I don't know exactly which sector will see this, but we haven't reached the 'overheated' stage yet. Especially when traditional financial capital enters, overinvestment may appear in certain areas, which is where investors need to be cautious to avoid a 'shakeout' when market prices become disconnected from reality.
Dreamer: Yes, when you talk about this, I think that when people have many successful trades, they become bored and crave that quick profit feeling again. Currently, there are many Bitcoin Layer 2 protocols announcing yield programs, but where do these yields come from? We don’t want to repeat the mistakes of the past by promising high returns without a real basis. Others may look for more trends to chase big profits, increasing the risks gradually. So for those who have experienced the last bull market, I hope they can learn from it, and for newcomers, I hope they can learn from others' experiences.
Casual talk about skiing.
This interview has been fantastic. We really appreciate your time. There's an IFC event tonight — a credit competition, and I wonder if you and others have time to attend. This is a global event, and we hope to invite you to participate in the future. I believe you would enjoy events like this, enjoying the influence of crypto figures during competitions and activities. Now, I pass the mic to Scott to conclude this interview.
Scott: Yes, we really appreciate your time and for sitting down with us to answer these questions. It would be great to see you at the IFC. One last easy question: When you're not doing cryptocurrency-related things, what do you do? What hobbies do you have? How do you relax or detach from this work? Are you a foodie? Do you look for new restaurants? Or are there other ways that keep you motivated?
Arthur: I really enjoy skiing. So I spend three to four months each year on the mountain, immersed in the snow. During the ski season, I ski for eight hours every day. Aside from exercising and enjoying outdoor activities, I hardly do anything else. This makes me very happy.
Scott: What is your favorite skiing location?
Arthur: Japan's Niseko. Their powder snow is fantastic, dry, and light. It snows there from January to February every year; it’s simply amazing.
Scott: So you are getting ready now? Adjusting your state?
Arthur: Yes, I am preparing for skiing. However, the only downside of Japan's ski resorts is that the slopes are not steep enough; they lack those dramatically steep trails.
Dreamer: The ski resorts in Salt Lake City will have lake effects. I live in Singapore now, but I used to live in the US and often went skiing, although I am a snowboarder.
Scott: I am 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 amazing! I haven’t skied in years, but it’s a hobby I’ve always wanted to pick back up. I’m from the northeastern US and grew up in New Jersey and New York, where I could easily go skiing in Vermont. But I’ve lived in Houston for the past decade, so skiing isn’t as convenient anymore; it’s not just a matter of packing my gear and driving a few hours.
Scott: I hope you have fun in the coming time. I really want to go to Japan to experience the joy of skiing; I didn’t realize they have such great skiing conditions. I must try it out in the future.
Bitcoin's price predictions for the end of the year and 2025.
Scott: By the way, let me ask a specific question. What do you think the price of Bitcoin will be by the end of this year and at this time next year?
Arthur: I think Bitcoin will reach $100,000 by the end of this year, and possibly $250,000 by the end of 2025.
Scott: Did you hear that? This is the first prediction released by Alpha First: Bitcoin will reach $100,000 by the end of the year and possibly $250,000 a year later. Maybe we have the opportunity to go to DevCon and other events next year to verify this prediction again. I hope by then it will be not just $250,000, but even higher.
