Translated by | Wu Says 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 potential rise of the Trump administration, the U.S. monetary easing policies will lead to the depreciation of the dollar, thereby driving up the prices of Bitcoin and other crypto assets. He also discussed global inflation, the monetary policies of sovereign countries, and how to enable Bitcoin and other crypto assets like meme coins to benefit. He emphasized that investors need to remain vigilant during the bull market to avoid ignoring market risks due to greed. Additionally, he looked forward to 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 Wu Says, and Wu Says does not endorse any products or tokens. Readers are advised to strictly adhere to local laws and regulations.
Listen to the full podcast (YouTube):
https://www.youtube.com/watch?v=xONEXGRcBMU
Trump's economic policies will lead to the depreciation of the dollar and benefit Bitcoin.
Dreamer: The elections 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? What should we pay attention to in the overall landscape of cryptocurrency predictions?
Arthur: From my perspective, market predictions are correct. They expect that Trump and his new cabinet members will 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 weak dollar policy. Then, they will inject a lot of funds through bank credit, increasing the credit volume 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. Those who possess assets with 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 bank credit in the U.S. with Bitcoin's performance. Currently, Bitcoin is clearly leading. This indicates that if Trump takes office, his plans are very clear—weakening the dollar, stimulating the market with credit, and getting people back to work to restore U.S. production 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 if Trump were to take office, Bitcoin would reach $1 million. Do you still believe everything will play out as expected? Are you still confident?
Arthur: I’m quite confident, but I’m 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 have continued this policy. So now, this confrontation has deeply embedded itself in American political culture.
In the past, the U.S. moved most of its manufacturing and production capacity to China and Asia, which gained a competitive advantage by weakening their currencies, thereby impacting American workers. Therefore, the U.S. must bring these industries back home. To achieve this goal, trillions of dollars in credit need to be allocated to businesses so that they can be profitable within the U.S.
Biden has passed measures like the Chips Act, infrastructure bill, and the Green New Deal, all of which require substantial 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 is much to discuss regarding Trump. From a domestic perspective, your points make sense and instill optimism in many. But if we look internationally, how will the elections affect foreign policy, war, and trade? For Asia, some policies might instill a certain fear. Will these policies have a negative impact on the economy or cryptocurrencies? Or should we not worry too much?
Arthur: Essentially, every country is now pursuing a 'domestic priority' policy. The U.S. has proposed 'America First,' while China hopes to bring prosperity back to its rural or low-income populations through its 'common prosperity' plan. Therefore, the Chinese government is suppressing the real estate bubble while also stimulating the economy again through monetary easing policies.
Japan is experiencing a capital repatriation, which will boost its economy, but it also needs more credit to prevent bank bankruptcies. Meanwhile, Europe is struggling because it has cut off cheap energy from Russia and turned to import expensive energy from the U.S. However, they still need to support business operations, so they will also implement stimulus policies.
So every country is working hard to take care of its own citizens, which means restoring domestic 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 of prioritizing 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 significant boon for Bitcoin and other crypto assets.
Will the rise of Bitcoin drive other crypto assets?
Dreamer: It seems like an excellent opportunity for cryptocurrencies, especially Bitcoin. But what about other cryptocurrencies? How do you view whether they will be influenced by Bitcoin's surge? Are you a Bitcoin maximalist, believing that only Bitcoin has potential and that others won't follow? Or do you think other projects, such as Ethereum, will have opportunities? For example, trends like NFTs, meme coins, and DeFi have fluctuated in the past. Will these also benefit from the market rise? Or is the focus mainly on institutional investors, believing that only Bitcoin will attract funds?
Arthur: I'm actually not very focused on the movements of institutional investors because everyone always says they're going to enter the market, but they have their own complex investment logic and credit considerations, and there are reasons whether they buy or not. From the perspective of retail investors, 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 currency because it doesn't make sense, right? I also won't only invest in Bitcoin. I want to put money into other crypto assets that have greater growth than Bitcoin.
What else can be done? We will focus on meme coins, new Layer 1 blockchains, Layer 2 projects, NFTs, and the gaming sector, among others. Bitcoin leads the market, and then funds will gradually flow into other categories of assets. Because ultimately, the goal is to earn more cryptocurrencies, not to exchange them back for fiat. I believe fiat will eventually go to zero.
Scott: Yes, I believe everyone will try to profit quickly, even becoming somewhat addicted to this rapid growth. After all, it’s 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 promising crypto assets. You also mentioned that the meme coins in this cycle surprised everyone, just like the NFTs in the previous cycle. I heard you hold some meme coins; is that part of the market interesting to you? How are meme coins performing in this cycle? Can they easily rise to billions of dollars in scale?
Arthur: This is indeed interesting; I really like it. This phenomenon is intriguing and entertaining, such as 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 hot topics in global culture and make them interesting through meme coins. Now, everyone knows about the 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, particularly regarding their inflation policies. This phenomenon also makes meme coins a rapidly spreading attention market.
The rapid rise of meme coins showcases the responsiveness of global culture.
Dreamer: We still have some existing meme coins like 'blue-chip' meme coins, such as those you just mentioned that are related to current events. I think these meme coins will fluctuate, 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.' They confirm certain things, which itself becomes a classic meme. I wish I had bought some back then, because these memes are just so good and 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 think when people start realizing how big the gap is between government propaganda and actual results, there will be a feeling of 'falling from grace.' People may reevaluate the meaning of these memes and the messages they convey. This shift will be very interesting.
Advice for newcomers: Stay rational and cash out appropriately in 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 flooding 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 rise of DeFi and NFTs, as well as other trends that were once hyped, the excitement at that time was very similar. So, what lessons or warnings 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 repeating the mistakes in this 'beautiful yet cruel world'?
Arthur: First, no one can profit from the market forever. Everyone knows that quick profits can be made in a bull market, but the key is how to preserve those gains. For example, the meme coin you hold now might not exist in a month or two. Its market cap could drop from $200 million to $5 million, with such dramatic changes. You cannot predict these things.
Some statistics show 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, but they always cling to the attitude of 'I can make more,' eventually leading to the loss of their existing wealth.
So, if you've made some money that is life-changing for you, take some of it out. The market will always have opportunities to come back. Perhaps you can take a break and reassess the market. It’s very important to stay rational.
Are there potential risks or catalysts in the market?
Scott: In this situation, people easily experience a round of 'roller coaster' market volatility. As you mentioned, some assets may 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 coins with a market cap of $2 billion could plummet quickly. Therefore, your point is correct; it's wise to cash out at the right time, whether it’s meme coins or Bitcoin, and to gradually exit some positions. As you said, taking profits won’t result in losses.
Dreamer: Are there any 'black swan events' or potential catalysts that could disrupt the market? Looking back at 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? Under a new Trump administration, has the market cleaned up these uncertainties and become simpler for development?
Arthur: I think a lot has already been cleared out. Many suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna events. So now, perhaps Bitcoin has already risen to $100,000 (possibly by the time you publish this interview, it will be at that price). But in the long term, when traditional financial capital sees the price of cryptocurrencies rising, they will want to participate, such as through venture capital.
Many venture capital firms have raised a lot 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. But as the bull market deepens, funds may flow into certain 'hot areas' because investors have to invest to get returns. In this situation, 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 yet know specifically which sectors will see this, but we have not reached the 'overheated' stage. Especially when traditional financial capital enters, overspending may occur in certain areas, which is where investors need to be cautious to avoid a 'shake-up' when market prices deviate from actual conditions.
Dreamer: Yes, while listening to you, I thought about how when people have many successful trades, they become bored and crave that quick profit feeling again. There are now many Bitcoin Layer 2 protocols announcing yield programs, but where does that yield come from? We don't want to repeat past mistakes of high-yield promises without actual foundation. Others may seek more trends for big returns, increasing the risks gradually. Therefore, for those who experienced the last bull market, I hope they can learn lessons, and for newcomers, I hope they can learn from others' experiences.
Casual talk about skiing.
This interview is 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. It’s a global event, and we hope to invite you to participate in the future. I believe you would enjoy such events, with influential figures in the crypto space participating in competitions and activities. Now, I’ll hand the microphone over to Scott to conclude this interview.
Scott: Yes, we truly 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 light question: When you’re not doing crypto-related things, what do you do? What are your hobbies? How do you relax or step away from this work? Are you a food lover? Do you seek out new restaurants? Or do you have other ways that keep you motivated?
Arthur: I really enjoy skiing. So every year, I spend three to four months on the mountain, immersed in the snow. During the ski season, I ski eight hours a day. Besides 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 fantastic, dry, and light. It snows there every January and February, and it’s simply amazing.
Scott: So you are preparing now? Getting into shape?
Arthur: Yes, I am preparing for skiing. However, the only downside of Japan's ski resorts is that the slopes are not steep enough, lacking that dramatic steepness.
Dreamer: The ski resorts in Salt Lake City will have lake effects. I live in Singapore, but I lived in the U.S. before and often went skiing, but 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 also won't encounter snowboarders 'trampling' your tracks on the slopes.
Scott: This is amazing! I haven't snowboarded in a few years, but it's a hobby I've always wanted to pick up again. I come from the northeastern United States, grew up in New Jersey and New York, and could easily go skiing in Vermont. However, I've been living in Houston for the past ten years, so skiing isn't as convenient anymore; it's no longer just a matter of loading up the gear and driving a few hours.
Scott: I hope you enjoy your time in the coming days. I really want to go to Japan and experience the fun of skiing there; I hadn't realized there were such great skiing conditions. I definitely need to try it out sometime.
Price predictions for Bitcoin by the end of the year and by 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 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: You heard it here, this is Alpha First's first prediction: Bitcoin's price will reach $100,000 by the end of the year and may hit $250,000 a year later. Perhaps we'll have the opportunity to go to DevCon and other events again next year to validate this prediction. I hope by then it's not just $250,000, but even higher.
