Compiled by: Wu Talks about Blockchain
Reprinted by: Luke, Mars Finance
In a recent interview with 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 United States' loose monetary policy will trigger a depreciation of the US dollar, which will in turn drive up the prices of Bitcoin and other crypto assets. He also discussed global inflation, sovereign monetary policies, and how to benefit other crypto assets such as Bitcoin and Memecoin. He emphasized that investors need to be vigilant in the bull market and avoid ignoring market risks due to greed. In addition, he looked ahead 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's perspective, and Wu does not endorse any products or tokens. Readers must 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 favor Bitcoin.
Dreamer: 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 broader landscape of cryptocurrency predictions, what should we pay attention to?
Arthur: From my perspective, market predictions are correct. They expect Trump and his new cabinet members to print a lot of money in the US. One of their campaign platforms is to attract manufacturing and industrial companies back to the US through a weak dollar policy. Then, they will inject a large amount of money through bank credit, increasing the credit in the US economy to drive production and raise wage levels. All of these will lead to inflation.
The ultimate losers are those saving in dollars or holding government bonds. Those with assets with a fixed supply, like Bitcoin, will perform exceptionally well. We've already seen this trend, right?
So, I plotted some data comparing the total amount of bank credit in the US with Bitcoin's performance. Currently, Bitcoin is clearly leading. This indicates that if Trump takes office, his plans are quite clear—weakening the dollar, stimulating the market with credit, getting 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, believing that if Trump took office, Bitcoin would reach $1 million. Do you still think everything will develop as expected? Do you still have confidence?
Arthur: I am 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 Biden government continued this policy when they took office. So now, this confrontation has deeply ingrained itself in American political culture.
The US has previously shifted most of its manufacturing and production capacity to China and Asia, where these countries gained a competitive advantage by weakening their currencies, impacting American workers. Therefore, the US must bring these industries back home. Achieving this goal requires allocating trillions of dollars in credit to allow them to profit domestically.
Biden has passed measures like the CHIPS Act, the Infrastructure Investment and Jobs Act, 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 often the most disruptive group. There are many things worth discussing around Trump. From a domestic perspective, your views make sense and give many people hope. But if we look internationally, how will the elections affect foreign policy, war, and trade? For Asia, some policies may bring a certain level of fear. Will these policies have a negative impact on the economy or cryptocurrencies? Or should we not worry too much?
Arthur: I think, 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 areas or low-income groups through its '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 seeing a capital inflow, which will boost its economy, but it also needs more credit to prevent bank bankruptcies. Europe, on the other hand, has cut off cheap energy from Russia and turned to importing expensive energy from the US, putting itself in a difficult situation. However, they still need to support businesses, so they will also implement stimulus policies.
So every country is trying to take care of its own citizens, which means restoring local industries and increasing demand for goods. This trend will drive inflation globally and further suppress the long-term outlook for bond yields.
In such an environment, cryptocurrencies will perform well. Although policies may seem different across countries, they are all 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 job opportunities for people. This global trend is a huge boon for Bitcoin and other crypto assets.
Will the rise of Bitcoin drive other crypto assets?
Dreamer: It seems like this is a great opportunity for cryptocurrency, 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 who believes that only Bitcoin has prospects and that others won't follow? Or do you think projects like Ethereum will have opportunities? For example, trends like NFTs, meme coins, and DeFi have gone through ups and downs. Will these benefit from the market rise, or should we mainly focus on institutional investors, believing that only Bitcoin will attract funds?
Arthur: I actually don't pay too much attention to the movements of institutional investors. Everyone always says they will enter the market, but they have their own complex investment logic and credit considerations, so there are reasons for buying or not buying. 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 revert to fiat currency because it doesn't make sense, right? I also won't just 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 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 currency. I believe fiat currency will eventually go to zero.
Scott: Yes, I think everyone will try to make quick profits and may even become somewhat addicted to this rapid growth. After all, this is one of the fastest-growing asset classes. If people profit from Bitcoin, many will not convert back to fiat currency but will instead turn to other potential crypto assets. You also mentioned that meme coins in this cycle have surprised everyone, just like NFTs in the last cycle. I heard you hold some meme coins; is this part of the market interesting to you? How are meme coins performing in this cycle? Can they easily reach a scale of billions?
Arthur: This is indeed fascinating; I really enjoy it. This phenomenon is interesting and fun, like that meme coin squirrel, which went from zero to $2 billion in just about nine days. Just because the US government executed a squirrel, it became a $2 billion meme coin traded globally. This phenomenon showcases how quickly we react to cultural hotspots globally and make it fun through meme coins. Now, everyone knows about this squirrel 'executed' by the US 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 also makes 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 interesting, especially when it involves government efficiency departments or new roles like 'Elon,' confirming some things that become classic memes. I wish I had bought some at that time because these memes are just too good and 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 outcomes, there will be a feeling of 'falling from grace.' People may reevaluate the significance 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 a 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 flowing into this space, along with more specialization 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 formerly hyped trends, 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 can they avoid repeating the mistakes in this 'beautiful yet cruel world'?
Arthur: First, no one can profit from the market forever. Everyone knows they can make quick money in a bull market, but the key is how to preserve those profits. For example, the meme coins you hold now could disappear in a month or two. Their market cap could drop from $200 million to $5 million, with such drastic changes. You cannot predict these things.
Some statistics show that only about 0.01% of meme coins have a market value that exceeds $500 million, and most traders ultimately lose money. Many see huge gains on paper, yet they always hold onto the emotion of 'I can earn more,' which ultimately leads to the loss of wealth they already had.
So, if you've earned some life-changing money, take some of it to cash out. The market will always provide opportunities to come back. Perhaps you can take a breather, take a break, and then reassess the market. Staying rational is very important.
Are there potential risks or catalysts in the market?
Scott: In this case, it's easy for people to 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 quickly plummet. Therefore, your point is valid; cashing out at the right time is necessary, whether it's meme coins or Bitcoin; you need to 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? If we look back over the past few years, like the collapse of FTX or other unforeseen events, are there any trends or entities we should remain vigilant about? Has the market already cleared these uncertainties under a new Trump administration, making it simpler for development?
Arthur: I think a lot has already been cleaned up. Many people suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna incidents. So, perhaps Bitcoin has already risen to $100,000 (maybe by the time you publish this interview, it will be at this price). But in the long run, when traditional financial capital sees cryptocurrency prices rising, they will want to get involved, for example, through venture capital.
Many venture capital firms have raised a lot of money, similar to the previous cycle, and they need to find large companies or important projects to invest in. In the early stages of the market, this capital is usually reasonably allocated and has good uses. But as the bull market deepens, capital may flow into certain 'hot areas' as investors have to invest to get returns. In this case, you may see some business models built on the assumption of continuously rising prices, leading to risk accumulation and ultimately market imbalance.
At the moment, I still don't know which sectors will experience this, but we have not yet reached the 'overheated' stage. Especially when traditional financial capital enters, overinvestment may occur in certain areas, which is where investors need to be cautious to avoid a 'shakeout' when market prices disconnect from reality.
Dreamer: Yes, when I listen to you, I think about how people become bored after many successful trades and crave that quick profit feeling again. There are currently many Bitcoin layer 2 protocols announcing yield programs, but where do these yields come from? We don't want to repeat the mistakes of the past, promising high returns without a solid foundation. Others may look for more trends to pursue big gains, which will gradually increase the risks. So, for those who 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 very exciting. We really appreciate your time. There is an IFC event tonight—a credit competition. I wonder if you and others have time to attend. This is a global event, and we really hope to have the opportunity to invite you in the future. I believe you would enjoy such events and the influential figures in the crypto space within the competitions and activities. Now, I will hand the microphone to Scott to conclude 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 IFC. Lastly, a light question: When you are not doing cryptocurrency-related things, what do you do? What hobbies do you have? How do you relax or disconnect from this work? For example, are you a foodie? Do you go looking for new restaurants? Or do you have other ways to stay motivated?
Arthur: I really enjoy skiing. So every year, I spend three to four months on the slopes, immersed in the snow. During the ski season, I ski for eight hours every day. Besides exercising and enjoying outdoor activities, I hardly do anything else. This makes me very happy.
Scott: What's your favorite skiing spot?
Arthur: Niseko in Japan. Their powder snow is fantastic, dry, and light. It snows there every January and February, and it's simply breathtaking.
Scott: So you're preparing now? Adjusting your state?
Arthur: Yes, I'm preparing for skiing. However, the only downside of skiing in Japan is that the slopes aren't steep enough; there's no dramatic steep terrain.
Dreamer: The ski resorts in Salt Lake City will have lake effect. I live in Singapore now, but I previously lived in the US and often went skiing, though I'm a snowboarder.
Scott: Me too! Although I still ski, I prefer snowboarding. Some places are suited for snowboarding.
Dreamer: Yes, there are places that are very suitable. You also won't encounter snowboarders 'trampling' on your tracks on the slopes.
Scott: That's amazing! I haven't skied for a few years, but it's an activity I've been wanting 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. However, I've lived in Houston for the past decade, so skiing isn't as convenient anymore; it's no longer just a matter of packing up and driving a few hours.
Scott: I hope you have fun in the upcoming time. I really want to experience the joy of skiing in Japan; I never thought there would be such great skiing conditions there. I definitely need to try it out in the future.
Bitcoin price predictions for year-end and 2025.
Scott: By the way, I have a specific question. What do you think Bitcoin's price will be at the end of this year and at this time next year?
Arthur: I think Bitcoin will reach $100,000 by the end of this year, and by the end of 2025, it may 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 this year and may reach $250,000 a year later. Perhaps we will have a chance 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.
