PANews reported on July 2 that Arthur Hayes, co-founder of BitMEX, wrote that we are at a critical historical turning point, and the global economic and geopolitical landscape is undergoing profound changes. Hayes emphasized that although the future is full of uncertainties, including which economic steady state will end, which country will lead the future, and the specific form of the trade finance architecture, he is convinced that this transformation process has shown a clear general direction. Against the backdrop of global inflation, Bitcoin's performance is particularly impressive, not only surpassing stocks, but also effectively resisting the depreciation of legal currencies, fully demonstrating its potential as a safe-haven asset. Hayes reminded investors that in the new economic cycle, they should pay close attention to changes in fiscal deficits and total non-financial bank credit. These indicators are crucial to understanding the current economic situation and future trends.
Hayes believes that we are in the midst of a new state-centric and highly localized inflation cycle. According to the latest forecasts, the U.S. budget deficit will expand sharply to $1.915 trillion in fiscal year 2024, a record high, mainly due to a significant increase in government spending. That's good news for those worried that Biden won't keep the economy alive with more spending ahead of the election. The Atlanta Fed expects real GDP growth to be as high as +2.7% in the third quarter of 2024. For those who are worried about a recession in Pax Americana, if we encounter a crisis of the same level as in 2008 and 2009, the decline in private economic growth will hardly exceed that of government spending, and the overall recession is unlikely. However, it should be noted that the financial difficulties of civilians still exist, and the overall trend of Pax Americana is moving forward.
In response to the current loose fiscal and monetary policy environment, Hayes suggested that investors consider cryptocurrency as a means of preserving value. He wrote: "Holding cryptocurrency is the best way to preserve value." He believes that with the continued expansion and centralized allocation of credit in the banking system, traditional currencies may face the risk of depreciation. Therefore, if conditions permit, flexibly adjusting asset allocation and moderately increasing the proportion of cryptocurrency holdings may provide more protection for investors.