Translation | 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 possible rise of the Trump administration, the U.S. monetary policy will lead to a depreciation of the dollar, which will drive 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 should remain vigilant during a bull market and avoid overlooking market risks due to greed. Additionally, he looked ahead to 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 Wu's perspective. Wu does not endorse any products or tokens, and readers are expected to strictly comply with local laws and regulations.
Listen to the full podcast (YouTube)
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 a vision to share with us? What should we pay attention to in the overall cryptocurrency prediction landscape?
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 U.S. One of their campaign agendas is to attract manufacturing and industrial enterprises back to the U.S. through a weak dollar policy. Then, they will inject a large amount of capital into the U.S. economy through bank credit, increasing the credit volume to boost production and raise wage levels. All of this will lead to inflation.
The ultimate losers are those saving in dollars or holding government bonds. Meanwhile, those with assets that have fixed supplies, like Bitcoin, will perform exceptionally well. We have already observed this trend, haven't we?
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 comes to power, his plan is already very clear—to weaken the dollar and stimulate the market with credit, getting people back to work and restoring America'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 once made a bold prediction that if Trump came to power, Bitcoin would reach $1 million. Do you still believe everything will develop as anticipated? Do you still have confidence?
Arthur:
I am very 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 continued this policy. So now, this confrontation has deeply ingrained itself in American political culture.
The United States has shifted most of its manufacturing and production capacity to China and Asia in the past, with these countries gaining a competitive advantage through currency devaluation, which has affected 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 to enable them to profit domestically.
Biden has passed measures like the CHIPS Act, Infrastructure Investment Act, and Green New Deal, all of which 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 often the most disruptive group. There is so much to discuss around Trump. From a domestic perspective, your views make a lot of sense and give many people optimism. But looking internationally, how will elections affect foreign policy, war, and trade? For Asia, some policies may provoke 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 currently following a 'America First' 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 re-stimulating the economy through monetary easing.
Japan is going through a capital repatriation, which will boost its economy, but it also needs more credit to prevent bank bankruptcies. Meanwhile, Europe finds itself in a predicament due to cutting off cheap energy from Russia and importing expensive energy from the U.S. However, they still need to support business operations, so they will also take stimulating policies.
So every country is working hard to take care of its citizens, which means restoring local industries and increasing demand for goods. This trend will drive global inflation higher and further suppress 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 allocation and an expansion of supply to support production and create jobs. This global trend is a significant benefit for Bitcoin and other crypto assets.
Will Bitcoin's rise drive other crypto assets?
Dreamer: It seems 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 surge? Are you a Bitcoin maximalist who believes only Bitcoin has potential, and that others won't follow? Or do you think other projects like Ethereum will have opportunities? For example, trends like NFTs, Meme coins, and DeFi have had their ups and downs. Will these also benefit from the market rise? Or is the primary focus on institutional investors, believing only Bitcoin will attract funds?
Arthur:
I actually don't pay much attention to the movements of institutional investors because they always say they will enter the market, but they have their own complex investment logic and credit considerations, and there are reasons for 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 return to fiat currency because it doesn't make sense, right? I also wouldn't only invest in Bitcoin. I want to invest in other crypto assets that have even greater potential than Bitcoin's price increase.
So what else can be done? 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 convert back to fiat. I believe fiat currencies will ultimately go to zero.
Scott: Yes, I think everyone will try to make quick profits and may even become a bit addicted to this rapid growth. After all, this is one of the fastest-growing asset classes. If people profit from Bitcoin, many will not return to fiat currency but will rather turn to other still-potential crypto assets. You also mentioned that Meme coins in this cycle have surprised everyone, just like NFTs in the previous 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 scale to billions of dollars?
Arthur:
This is indeed interesting; I really like it. This phenomenon is amusing and intriguing, like that Meme coin squirrel that went from zero to $2 billion in just about nine days. Just because the U.S. government executed a squirrel, it became a $2 billion Meme coin traded globally. This phenomenon showcases how quickly we 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 U.S. government or the state of New York. 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 global culture's responsiveness
Dreamer: We also have some existences like 'blue-chip' Meme coins, like those you just mentioned 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 is possible?
Arthur:
I think it's possible. It's very interesting, especially when it involves government efficiency departments or new roles like 'Elon,' who confirm certain things that become classic Memes themselves. I wish I had bought some back then because these Memes are just too good and too interesting. Elon is a very talented 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 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 significance of these Memes and the messages they convey. This shift will be very interesting.
Advice for newcomers: Stay rational during the bull market and cash out at the right times.
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 pouring into this field, along with more specialized trends. Additionally, as you mentioned, the momentum brought by elections is also very strong. If we look back at the past, like the rise of DeFi and NFTs, and other trends that were once hyped, the excitement at that time was quite 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 keep those gains. For instance, the Meme coin you hold now may not exist in a month or two. Its market value could drop from $200 million to $5 million, which is such a drastic change. You cannot predict these things.
Some statistics indicate that only about 0.01% of Meme coins can exceed a market value of $500 million, and most traders ultimately lose money. Many see huge returns on paper, yet they always hold onto the mindset of 'I can earn more,' which ultimately leads to the loss of wealth they already have.
So, if you make some life-changing money, take some out and cash it out. The market will always present opportunities to come back. Perhaps you can take a break to calm down, 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 round of 'roller coaster' market fluctuations. As you mentioned, some assets may disappear within a month or two. Some people indeed made life-changing money in just a few days, like Meme coin Peanut. But even coins with a market value of $2 billion can quickly crash. Therefore, your point is correct; one should 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 lead to losses.
Dreamer: Are there any 'black swan events' or potential catalysts that could disrupt the market? Looking back over the past few years, such as 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 believe a lot has already been cleaned up. Many people suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna events. So now, perhaps Bitcoin has already risen to $100,000 (which might be the price when you publish this interview). But in the long run, when traditional financial capital sees the rising prices of cryptocurrencies, they will want to participate, perhaps 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, this capital is typically allocated reasonably and has good uses. But as the bull market deepens, the capital may flow into certain 'hot areas' because investors need 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.
I don't yet know specifically which sectors will see this, but we haven't reached a 'overheated' stage. Especially when traditional financial capital enters, over-investment may occur in certain areas, which is where investors need to be cautious to prevent a 'shakeout' when market prices deviate from reality.
Dreamer: Yes, when I hear you talk, I think that when people have many successful trades, they can become bored and crave that feeling of quick profit again. Currently, many Bitcoin Layer 2 protocols have announced yield programs, but where is this yield coming from? We don’t want to repeat the mistakes of the past that promised high returns without actual foundations. Others may look for more trends to pursue high returns, increasing risks gradually. So, 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.
Chit-chat about skiing
This interview has been fantastic. We really appreciate your time. There is an IFC event tonight—a credit face-off, and I'm not sure if you and others have time to attend. This is a global event, and we truly hope to invite you in the future. I believe you will enjoy such events, enjoying the influential figures in the crypto space during the competitions and activities. Now I'll hand the mic over to Scott to wrap up 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 crypto-related things, what do you do? What hobbies do you have? How do you relax or detach from this 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 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's your favorite ski spot?
Arthur:
Japan's Niseko. Their powder snow is fantastic, dry and light. It snows there every January and February; it's simply stunning.
Scott: So you're preparing now? Getting in 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 those dramatic steep runs.
Dreamer: The ski resorts in Salt Lake City will have lake effect. I live in Singapore now, but I used to live in the U.S. and often went skiing, though I'm a snowboarder.
Scott: Me too! Although I still ski, I prefer snowboarding. Some places are perfect for snowboarding.
Dreamer: Yes, some places are very suitable. You also won’t encounter snowboarders 'trampling' your tracks on the slopes.
Scott: That's amazing! I haven't skied in a few years, but it's a hobby I've always wanted to pick up again. I come from the northeastern U.S., grew up in New Jersey and New York, where I could easily go skiing in Vermont. But for the past decade, I've lived in Houston, so it's not as convenient to go skiing anymore; it's no longer just a matter of loading up gear and driving a few hours.
Scott: Hope you have fun in the coming time. I really want to go to Japan to experience the fun of skiing; I never thought there would be such great skiing conditions there. I must try it out someday.
Bitcoin 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 believe Bitcoin will reach $100,000 by the end of this year and could reach $250,000 by the end of 2025.
Scott: You heard it, this is the first prediction announced by Alpha First: Bitcoin's price will reach $100,000 by the end of the year and may reach $250,000 a year later. Perhaps we will have the opportunity to go to DevCon and other events next year to verify this prediction again. I hope by then it will not only be $250,000 but even higher.
