Compiled 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 US's loose monetary policy will lead to a depreciation of the dollar, subsequently driving 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 in a bull market to avoid neglecting market risks due to greed. Furthermore, he forecasted future market trends and predicted that Bitcoin could reach a milestone of $250,000 by 2025.
Please note: The views of the guests do not represent the views of Wu Says. Wu Says does not endorse any products or tokens, and readers should strictly comply with the laws and regulations of their respective locations.
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 elections just concluded a few weeks ago, and there are 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 landscape of cryptocurrency predictions, 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 lot of money in the US. One of their campaign agendas is to attract manufacturing and industrial companies back to the US through a weakened dollar policy. Then, they will inject a large amount of money through bank credit, increasing the credit volume in the US economy to boost 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 hold 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 US bank credit with the performance of Bitcoin. Currently, Bitcoin is clearly leading. This indicates that if Trump takes office, his plan is already clear—weakening the dollar, stimulating the market with credit, bringing people back to work, and restoring America's productive capacity. I believe he will execute this plan.
Will Bitcoin reach $1 million?
Scott: I have 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 think everything will develop 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 began when Trump was elected president in 2016. At that time, he promoted a trade war against China, and the Democratic Party and Biden administration continued this policy. So now this confrontation has deeply rooted in American political culture.
The US has historically shifted most of its manufacturing and production capacity to China and Asia, where these countries gained a competitive advantage by weakening their currencies, affecting American 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 become profitable domestically.
Biden has passed the CHIPS Act, infrastructure bill, and Green New Deal, among other measures, which all require substantial 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 around Trump. From a domestic perspective, your viewpoint makes sense and gives many people optimism. But looking internationally, how will the election affect foreign policy, war, and trade? For Asia, some policies may bring about certain fears. Will these policies have a negative impact on the economy or cryptocurrencies? Or should we not worry too much?
Arthur: I believe that, essentially, every country is now pursuing a 'national priority' policy. The US has proposed 'America First,' while China hopes to bring prosperity back to rural or low-income populations through its 'common prosperity' plan. Therefore, the Chinese government has suppressed the real estate bubble and is now stimulating the economy through monetary easing policies.
Japan is experiencing a capital repatriation, which will boost its economy, but it also requires more credit to prevent bank bankruptcies. Meanwhile, Europe is facing difficulties after cutting off cheap energy from Russia and switching to expensive energy from the US. However, they still need to support business operations, so they will also adopt stimulus policies.
So every country is trying to take care of its citizens, which means restoring 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: prioritizing 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 very favorable 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 potential, and others will not follow? Or do you think other projects like Ethereum will have opportunities? For example, NFTs, meme coins, and DeFi, these trends have fluctuated in the past. Will these also benefit from the market rise? Or are you mainly focused on institutional investors and only believe Bitcoin will attract funds?
Arthur: I actually don’t pay too much attention to institutional investors because everyone always says they will enter the market, but they have their own complex investment logic and credit considerations, whether to buy or not buy for reasons. 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 because it doesn’t make sense, right? I won’t only invest in Bitcoin. I want to invest in other crypto assets that have greater potential for appreciation than Bitcoin.
So what else can be done? We will focus on meme coins, new Layer 1 blockchains, Layer 2 projects, NFTs, and the gaming space, etc. Bitcoin leads the market, and then funds will gradually flow into other categories of assets. Because ultimately, the goal is to earn more cryptocurrencies rather than convert back to fiat currency. I believe that fiat currency will ultimately go to zero.
Scott: Yes, I think everyone will try to profit quickly, even becoming somewhat addicted to this rapid growth. After all, it is one of the fastest-growing asset classes. If they profit from Bitcoin, many people will not convert back to fiat but will turn to other crypto assets that still have potential. You also mentioned that meme coins in this cycle have shocked everyone, just like NFTs in the last cycle. I've heard you hold some meme coins; is this part of the market interesting to you? How have meme coins performed in this cycle? Can they easily rise to the scale of several billion dollars?
Arthur: This is indeed very interesting, and I love it. This phenomenon is both intriguing and amusing, like that meme coin squirrel, which went from zero to $2 billion in about nine days. It became a $2 billion meme coin traded globally just because the US government executed a squirrel. This phenomenon shows how we can quickly react to hot topics in global culture and make them interesting through meme coins. Now, everyone knows about this squirrel that was 'executed' by the US government or New York.
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 showcases the responsiveness of global culture.
Dreamer: We also have some '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 very interesting, especially when it comes to roles like government efficiency departments or new 'Elon'-like figures, they confirm certain things, which itself becomes a classic meme. I wish I had bought some at the time 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 may indeed reach $1.
However, I think when people start to realize how large the gap is between government propaganda and actual results, there will be a feeling of 'falling from grace'. People may re-examine the significance of these memes and the messages they convey. This transition will be very interesting.
Advice for newcomers: Stay rational and take profits in a bull market.
Dreamer: There are many technologies now that make it easier to launch new Layer 1 blockchain projects or meme coins. I think we will see more creativity flooding into this space, as well as more trends of specialization entering. Additionally, as you mentioned, the momentum brought by elections is also very strong. If we look back at things like the rise of DeFi and NFTs, as well as other trends that were once hyped up, the excitement at that time 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 repeating past mistakes in this 'beautiful yet cruel world'?
Arthur: First of all, 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 instance, the meme coins you hold now may not exist in a month or two. Its market value may drop from $200 million to $5 million, changing so drastically. You can't predict these things.
Some statistics indicate that only about 0.01% of meme coins have a market value that can exceed $500 million, and most traders ultimately lose money. Many people see tremendous gains on paper, yet they always hold on to the mindset of 'I can earn more,' ultimately leading to the loss of wealth they already have.
So if you have earned some money that is life-changing for you, take some out to cash in. The market will always present opportunities to come back. Perhaps you can take a moment to calm down, take a break, and reassess the market. It is important to stay rational.
Are there potential risks or catalysts in the market?
Scott: In such circumstances, it is easy for people to experience a round of 'roller coaster' market fluctuations. As you mentioned, some assets may disappear within a month or two. Some people have indeed made life-changing money in a few days, like the meme coin Peanut. But even coins with a market cap of $2 billion can quickly crash. Therefore, your point is correct; it is necessary to take profits in a timely manner, whether it’s meme coins or Bitcoin, and gradually exit some positions. As you said, taking profits will not lead to losses.
Dreamer: Are there any 'black swan events' or potential catalysts that could disrupt the market? Looking back at the last few years, like the collapse of FTX or other unforeseen events, are there any trends or entities we need to be vigilant about? Under the new Trump administration, has the market cleared these uncertainties and become simpler for development?
Arthur: I think a lot has already been cleared out. Many people have suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna events. So, perhaps Bitcoin has already risen to $100,000 (maybe by the time you publish this interview, that will be the price). But in the long run, when traditional financial funds see the price of cryptocurrencies rising, they will want to get involved, perhaps through venture capital.
Many venture capital firms have raised a lot of money, similar to the last cycle; they need to find large companies or important projects to invest in. In the early stages of the market, this capital is usually allocated reasonably and has good uses. However, 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 risk accumulation and ultimately market imbalance.
Currently, I don't know which sector will experience this, but we have not yet reached the 'overheated' stage. Especially when traditional financial capital enters, over-investment may occur in certain areas, which is where investors need to be vigilant to avoid a 'shakeout' when market prices become disconnected from actual situations.
Dreamer: Yes, when you talk about it, I think of how when people have many successful trades, they become bored and crave that feeling of quick profit again. Currently, many Bitcoin Layer 2 protocols have announced yield plans, but where is this yield coming from? We don't want to repeat the past mistakes of promising high yields without a real basis. Others may seek more trends to pursue great returns, which would gradually increase risks. Therefore, for those who have experienced the last bull market, I hope they can learn from the lessons, and for newcomers, I hope they can learn from the experiences of others.
Casual talk about skiing.
This interview has been fantastic. We greatly appreciate your time. There is an IFC event tonight—a credit competition—and I'm not sure if you and others have time to attend. It's a global event, and we really hope to have the opportunity to invite you to participate in the future. I believe you would enjoy events like this, with influential people in the crypto space involved in the competition and activities. Now I'll hand the microphone to Scott to wrap up this interview.
Scott: Yes, we greatly appreciate your time and sitting down with us to answer these questions. It would be great to see you at the IFC. Lastly, a light question: What do you do when you're not involved in cryptocurrency? Do you have any hobbies? How do you relax or detach from 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 mountain, immersed in the snow. During the ski season, I ski for eight hours a day. Besides exercising and enjoying outdoor activities, I hardly do anything else. This makes me very happy.
Scott: What is your favorite skiing location?
Arthur: Niseko in Japan. Their powder snow is fantastic, dry and light. It snows there every January to February, and it's simply amazing.
Scott: So are you preparing now? Are you adjusting your state?
Arthur: Yes, I am preparing for skiing. However, the only drawback of the ski resorts in Japan is that the slopes are not steep enough; there are no very dramatic steep slopes.
Dreamer: The ski resorts in Salt Lake City will have a lake effect. I live in Singapore but previously lived in the US and often went skiing; however, I'm a snowboarder.
Scott: I'm with you! Although I still ski, I prefer snowboarding. Some places are better for snowboarding.
Dreamer: Yes, some places are very suitable. You won't encounter snowboarders 'trampling' on your tracks on the slopes.
Scott: That's awesome! I haven't skied in years, but it's a hobby I've always wanted to pick up again. I'm from the northeastern US, grew up in New Jersey and New York, and could easily go skiing in Vermont. But for the past ten years, I've lived in Houston, and skiing isn't as convenient anymore; it's not just a matter of packing up and driving a few hours.
Scott: 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 there were such great skiing conditions there. I must try it out in the future.
Price predictions for Bitcoin by the end of the year and in 2025
Scott: By the way, here's a specific question. What do you think the price of Bitcoin will be at the end of this year and by this time next year?
Arthur: I believe Bitcoin will reach $100,000 by the end of this year and may reach $250,000 by the end of 2025.
Scott: You've heard it, this is the prediction first announced by Alpha First: Bitcoin's price will reach $100,000 by the end of the year and possibly $250,000 one year later. Perhaps we will have a chance to go to DevCon and other events next year to verify this prediction again. I hope that by then, it will not only be $250,000 but even higher.
