Original translation: Wu Shuo Blockchain
In a recent interview on the podcast Alpha First, Arthur Hayes shared his bold predictions for the future of the cryptocurrency market. He believes that with the possible return of the Trump administration, the U.S. loose monetary policy will trigger a devaluation of the dollar, further driving up the prices of Bitcoin and other crypto assets. He also discussed global inflation, the monetary policies of sovereign nations, and how to benefit assets like Bitcoin and meme coins. He emphasized that investors should remain vigilant in a bull market to avoid being blinded by greed and ignoring market risks. Additionally, he looked ahead at future market trends and predicted that Bitcoin could reach the milestone of $250,000 by 2025.
Please note: The views of the guests do not represent those of Wu Shuo. Wu Shuo does not endorse any products or tokens, and readers should strictly comply with the laws and regulations of their jurisdiction.
Listen to the full podcast (YouTube):
https://www.youtube.com/watch?v=xONEXGRcBMU
Trump's economic policies will devalue the dollar and benefit Bitcoin.
Dreamer: Just a few weeks after the election, 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 whole landscape of cryptocurrency predictions, what should we pay attention to?
Arthur: From my perspective, the market predictions are correct. They expect Trump and his new cabinet members to print a lot of money in the U.S. One of their campaign agendas is to attract manufacturing and industrial companies back to the U.S. through a weaker dollar policy. Then they will inject a lot of money through bank credit, increasing the amount of credit in the U.S. economy to drive 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. Meanwhile, those who have assets with a fixed supply, like Bitcoin, will perform exceptionally well. We are already seeing this trend, right?
So, I plotted some data comparing the total amount of U.S. bank credit with Bitcoin's performance. Currently, Bitcoin is clearly ahead. This indicates that if Trump comes to power, his plan is clear—devalue the dollar, stimulate the market with credit, and bring people back to work to restore American manufacturing capacity. I believe he will execute this plan.
Will Bitcoin reach $1 million?
Scott: I have a follow-up question about Trump. You once made a bold prediction that if Trump came to power, Bitcoin would reach $1 million. Do you still believe everything will unfold as expected? Are you still confident?
Arthur: I am very confident, but I'm not sure if it will happen in the short term. In fact, this trend began when Trump was elected president in 2016. At that time, he pushed for a trade war against China, and the Democratic Party and Biden administration continued this policy after taking office. So now, this confrontation has deeply penetrated American political culture.
The United States has shifted most of its manufacturing and production capacity to China and Asia, where these countries gained a competitive advantage by devaluing their currencies, which negatively affected American workers. Therefore, the U.S. must bring these industries back home. To achieve this, trillions of dollars in credit need to be allocated to businesses to make them profitable domestically.
Biden has passed measures like the CHIPS Act, infrastructure construction bill, and Green New Deal, all of which require a lot of funding support. This trend will continue.
Global economic policies will drive inflation up and benefit crypto assets.
Dreamer: People in the crypto space are usually the most disruptive group. There’s a lot to discuss regarding Trump. From a domestic perspective, your views make sense and give many people optimism. But if we look internationally, how will the elections affect foreign policy, wars, and trade? For Asia, some policies may bring a certain fear. Will these policies negatively impact 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 U.S. has proposed 'America First', while China hopes to bring prosperity back to rural areas or low-income populations through the 'common prosperity' plan. Therefore, the Chinese government has suppressed the real estate bubble and is now trying to stimulate the economy again through monetary easing policies.
Japan is experiencing capital repatriation, which will boost its economy, but it also requires more credit to prevent bank bankruptcies. Meanwhile, Europe is struggling due to cutting off cheap energy from Russia and turning to expensive energy imports from the U.S. They still need to support businesses, so they will also adopt stimulus policies.
So every country is working hard to take care of its own people, which means restoring local industries and increasing demand for goods. This trend will drive inflation globally, 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 own citizens. This requires an increase in internal credit allocation and an expansion of supply to support production and create jobs for the people. This global trend is a significant boon for Bitcoin and other crypto assets.
Will Bitcoin's rise drive other crypto assets?
Dreamer: It seems this is a great opportunity for cryptocurrencies, especially Bitcoin. But what about other cryptocurrencies? How do you see whether they will be influenced by Bitcoin's rise? Are you a Bitcoin maximalist, believing that only Bitcoin has prospects while others will not follow? Or do you think other projects like Ethereum will have opportunities? For instance, NFTs, meme coins, and DeFi, these trends have had their ups and downs. Will these also benefit from the market rise? Or is it mainly focused on institutional investors, believing that only Bitcoin will attract funds?
Arthur: I actually don't pay much attention to the movements of institutional investors because everyone always says they will enter the market, but they have their own complex investment logic and credit considerations, and there are reasons for buying or not buying. From the perspective of retail investors, when the price of Bitcoin rises, everyone's most important asset is Bitcoin. When my wealth in Bitcoin increases, I don't want to convert 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 a larger growth potential than Bitcoin.
What else can be done? We will focus on meme coins, new Layer 1 blockchains, Layer 2 projects, NFTs, and gaming, etc. Bitcoin leads the market, and then funds will gradually flow to other asset classes. Because ultimately, the goal is to earn more cryptocurrencies rather than convert back to fiat. I believe fiat currency will eventually go to zero.
Scott: Yes, I think everyone will try to make quick profits and even become somewhat addicted to this rapid growth. After all, it is one of the fastest-growing asset classes. If people profit from Bitcoin, many will not convert back to fiat but will shift towards other crypto assets that still hold potential. You also mentioned that meme coins this cycle have surprised everyone, just like NFTs did in the last cycle. I heard you hold some meme coins; is this segment of the market interesting to you? How are meme coins performing this cycle? Can they easily grow to scales of billions of dollars?
Arthur: This is indeed very interesting; I love it. This phenomenon is fun and amusing, like that meme coin squirrel, which went from zero to $2 billion in about nine days. Just because the U.S. government executed a squirrel, it became a $2 billion meme coin traded globally. This phenomenon shows how quickly we react to hotspots in global culture and make it interesting through meme coins. Now, everyone knows about this squirrel that was 'executed' by the U.S. government or New York State. Thus, a meme coin emerged 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 quickly spreading attention market.
The rapid rise of meme coins demonstrates the global culture's responsiveness.
Dreamer: We also have some 'blue-chip' meme coins, like those meme coins 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 interesting, especially when it comes to the government's efficiency department or new roles like 'Elon', as they confirm certain things that become a classic meme in themselves. I wish I had bought some at the time because these memes are just too good and too fun. Elon is a very talented meme creator, perhaps 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 when people start to realize how big the gap is between government propaganda and actual results, there will be a sense of 'falling from grace.' People may re-examine the meanings 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 the bull market.
Dreamer: There are now many technologies that make it easier to launch new Layer 1 blockchain projects or meme coins. I think we will see more creativity flow into this area, along with more trends of specialization. Additionally, as you mentioned, the momentum brought by the elections is quite strong. If we look back at the past, like the rise of DeFi and NFTs, as well as other trends that were once hyped, the excitement back then was very similar. So what lessons or cautionary tales can be shared? Particularly 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 repeating mistakes in this 'beautiful yet cruel world'?
Arthur: Firstly, no one can profit from the market forever. Everyone knows that quick money can be made in a bull market, but the key is how to keep those gains. For example, the meme coins you hold now may not exist in a month or two. Their market value might drop from $200 million to $5 million; the fluctuations are 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 sentiment of 'I can earn more,' ultimately leading to the loss of their already possessed wealth.
So, if you've made some life-changing money, take some out to cash. The market will always have opportunities to come back. Maybe you can take a break, vacation for a while, and then reassess the market. It's very important to stay rational.
Are there potential risks or catalysts in the market?
Scott: In this situation, it's easy for people to experience a roller coaster-like market volatility. As you mentioned, some assets may disappear in a month or two. Some people have indeed made life-changing money in just a few days, like the meme coin Peanut. But even coins with a market cap of $2 billion can crash quickly. So, your point is right; it is wise to cash out at the right time, whether it's meme coins or Bitcoin, and gradually exit some positions. As you said, taking profits will not lose money.
Dreamer: Are there any 'black swan events' or potential catalysts that could disrupt the market? If we look back at the past few years, like the collapse of FTX or other unforeseen events, are there any trends or entities we should be wary of? Has the market cleared these uncertainties under the new Trump administration, making it simpler for development?
Arthur: I think much has already been cleared out. Many suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna events. So, perhaps Bitcoin has already risen to $100,000 (possibly at the time you release this interview). But in the long run, when traditional financial capital sees the price of cryptocurrencies rising, they will want to get involved, such as through venture capital.
Many venture capital firms have raised large amounts of funds, 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. However, as the bull market deepens, funds may flow into certain 'hot areas' because investors have to invest to achieve returns. In such cases, we may see some business models built on the assumption of continuously rising prices, leading to accumulated risks and ultimately market imbalance.
I still don't know exactly which sector will experience this, but we have not reached the 'overheated' stage yet. Especially when traditional financial capital enters, excess investment may appear in certain areas, which is where investors need to be vigilant to avoid a 'shuffle' when market prices become disconnected from reality.
Dreamer: Yes, when I hear you talk, I think that when people have many successful trades, they become bored and crave that quick profit feeling again. Currently, many Bitcoin Layer 2 protocols have announced yield programs, but where does this yield come from? We don't want to repeat the mistakes of the past, promising high yields without any actual basis. Others may seek more trends to pursue big returns, which also gradually increases risks. So, for those who experienced the last bull market, I hope they can learn their lessons, 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 is 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, loving the influential figures in the crypto space. Now I’ll 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 IFC. 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 step away from this work? For example, are you a foodie? 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 each year on the slopes, immersed in the snow. During the ski season, I ski for eight hours every day. Aside from exercising and enjoying outdoor activities, I do almost nothing else. This makes me very happy.
Scott: What is your favorite skiing spot?
Arthur: Niseko in Japan. Their powder snow is amazing, dry and light. It snows there every January and February; it's simply stunning.
Scott: So are you preparing now? Are you adjusting your state?
Arthur: Yes, I am preparing for skiing. However, the only downside of the ski resorts in Japan is that the slopes aren’t steep enough; there aren’t those dramatically steep trails.
Dreamer: The ski resorts in Salt Lake City have a lake effect. I live in Singapore now, but I used to live in the U.S. and often went skiing, but I'm a snowboarder.
Scott: Me too! While I still ski, I prefer snowboarding. Some places are great 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 always want to pick up again. I come from the Northeast of the U.S., 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 my gear and driving a few hours.
Scott: Hope you have fun in the coming time. I really want to try skiing in Japan; I didn't think there were such great skiing conditions there.
Predictions for Bitcoin's price by the end of this year and in 2025.
Scott: Just a specific question. What do you think Bitcoin's price will be at the end of this year and 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 might reach $250,000.
Scott: Did you hear that? This is the first prediction released by Alpha First: Bitcoin's price will reach $100,000 by the end of the year and may hit $250,000 a year later. Perhaps 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.
Original link
