In a recent interview with the Alpha First podcast, Arthur Hayes shared his bold predictions for the future of the cryptocurrency market. He believes that as the Trump administration comes to power, the United States' loose monetary policy will trigger a depreciation of the U.S. dollar, which will in turn push up the prices of Bitcoin and other crypto assets. He also discusses global inflation, sovereign monetary policy, and how to benefit other cryptoassets such as Bitcoin and Memecoin. He emphasized that investors need to remain vigilant in the bull market and avoid ignoring market risks due to greed. Additionally, he looked at future market trends and predicted that Bitcoin could reach the $250,000 milestone by 2025.
Please note: The views of each guest do not represent Wu's views, and Wu does not endorse any products or tokens. Readers should strictly adhere to the laws and regulations of their location.
Listen to the full podcast (YouTube):
Trump's economic policies will lead to a devaluation of the dollar and benefit Bitcoin.
Dreamer: It's been just weeks since the election, and the market has seen many changes. What can we expect in the next 12 months? Do you have any visions to share with us? In the entire landscape of cryptocurrency predictions, what should we pay attention to?
Arthur: From my perspective, the market's prediction is correct. They expect Trump and his new cabinet members to print a large amount of currency in the United States. 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 large amounts 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 have assets with a 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 shows that if Trump were to take office, his plan is already clear—devalue the dollar, stimulate the market with credit, and get people back to work to restore America's production capacity. I think 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 took office, Bitcoin would reach $1 million. Do you still believe everything will develop as expected? 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 have continued this policy. So now, this confrontation has deeply rooted itself in American political culture.
In the past, the U.S. moved 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 U.S. must bring these industries back home. To achieve this goal, trillions of dollars in credit need to be allocated to businesses so they can profit domestically.
Biden has passed measures such as the CHIPS Act, the Infrastructure 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 benefit crypto assets.
Dreamer: People in the crypto space are often the most disruptive group. There are many discussions around Trump that are worth having. From a domestic standpoint, your views make sense and give many people optimism. But if we look internationally, how will the elections affect foreign policy, war, and trade? For Asia, some policies might bring certain fears. Will these policies negatively impact the economy or cryptocurrency? Or should we not worry too much?
Arthur: I believe that essentially every country is now pursuing a 'country first' policy. The U.S. advocates 'America First', while China hopes to bring prosperity back to rural areas or low-income populations through 'common prosperity.' Therefore, the Chinese government has suppressed the real estate bubble and is now re-stimulating the economy through monetary easing policies.
Japan is undergoing capital repatriation, which will boost its economy, but it also needs more credit to prevent bank bankruptcies. Meanwhile, Europe is in a bind due to its reliance on expensive energy imports from the U.S. after cutting off cheap energy from Russia. But they still need to support businesses, so they will also adopt stimulus policies.
So every country is trying to take care of its citizens, which means restoring local industry and increasing demand for goods. This trend will drive inflation up 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 actually pursue the same goal: prioritizing the needs of their citizens. This requires an increase in domestic credit allocation and an expansion of supply to support production and create jobs. This global trend is a great positive for Bitcoin and other crypto assets.
Will the rise of Bitcoin drive other crypto assets?
Dreamer: It looks like this is a fantastic opportunity for cryptocurrencies, especially Bitcoin. But what about other cryptocurrencies? How do you view whether they will be affected by Bitcoin's rise? Are you a Bitcoin maximalist who believes only in Bitcoin's potential, and that 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 they also benefit from the market uptrend, or are we mainly focusing on institutional investors, believing that only Bitcoin will attract funds?
Arthur: I actually don't pay much attention to the movements of institutional investors because everyone always says they will enter the market, but they have their own complex investment logic and credit considerations for buying or not buying. From the perspective of retail investors, when Bitcoin prices rise, 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 also won't just invest in Bitcoin. I want to invest in other crypto assets that have bigger growth than Bitcoin.
What else can we do? We'll focus on meme coins, new Layer 1 blockchains, Layer 2 projects, NFTs, and gaming, etc. Bitcoin leads the market, and then funds will gradually flow into other asset categories. Because ultimately, the goal is to earn more cryptocurrencies, not to convert back to fiat. I believe fiat will eventually go to zero.
Scott: Yes, I believe everyone will try to profit quickly and may even become somewhat addicted to such rapid growth. After all, this is one of the fastest-growing asset classes. If they profit from Bitcoin, many people won’t convert back to fiat; instead, they'll turn to other crypto assets that still have potential. You also mentioned that the meme coins in this cycle have surprised everyone, just like NFTs did in the previous cycle. I heard you hold some meme coins; is this part of the market interesting for you? How have meme coins performed in this cycle? Can they easily rise to billion-dollar valuations?
Arthur: This is indeed interesting; I really like 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 U.S. government executed a squirrel, it became a $2 billion meme coin traded worldwide. This phenomenon demonstrates how quickly we react culturally to hotspots and make them interesting through meme coins. Now everyone knows about this squirrel that was 'executed' by the U.S. government or New York State. Thus, a meme coin was created around it.
It's both interesting and reflective of reality. There may also be a subculture of dissatisfaction with the government, such as the inflation policies they have implemented. This phenomenon also makes meme coins a rapidly spreading attention market.
The rapid rise of meme coins demonstrates 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 involves government efficiency departments or new 'Elon'-like roles that 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 fun. Elon is a very good 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 feel that when people begin to realize how large the gap is between government propaganda and actual results, there will be a sense of 'falling from the pedestal'. People may reevaluate the meaning 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 time.
Dreamer: There are now many technologies that make it easier for people to launch new Layer 1 blockchain projects or meme coins. I think we will see more creativity flowing into this space, along with more professional trends. Also, as you mentioned, the momentum brought by the elections is very strong. Looking back, for instance, at the rise of DeFi and NFTs, as well as other trends that were once hyped, the excitement back then 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 mistakes in this 'beautiful yet brutal world'?
Arthur: First of all, no one can make a profit from the market forever. Everyone knows that money can be made quickly in a bull market, but the key is how to preserve those earnings. For instance, the meme coins you hold now could be gone in a month or two. Their market cap could drop from $200 million to $5 million, with such drastic changes. You can't predict these things.
Some statistics indicate that only about 0.01% of meme coins can exceed a market cap of $500 million, and most traders ultimately lose money. Many people see huge gains on paper, yet they always hold onto the mindset of 'I can earn more,' which ultimately leads to losing the wealth they already have.
So if you earn some money that can change your life, take some out to cash out. The market will always have opportunities to return. Perhaps you could take a breather, go on a vacation, and then 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 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, such as the meme coin Peanut. But even coins that reach a market cap of $2 billion can quickly crash. Therefore, your point is valid; it's essential to 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 result in 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 watch out for? Has the market already cleared these uncertainties under the new Trump administration, becoming simpler for development?
Arthur: I believe a lot has already been cleared out. Many people suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna events. So maybe Bitcoin has already risen to $100,000 by now (perhaps by the time you publish this interview, that's the price). But in the long run, when traditional financial funds see the price of cryptocurrencies rise, they will want to participate, such as through venture capital.
Many venture capital firms have raised a lot of money, similar to the last cycle; they need to find big companies or important projects to invest in. In the early stages of the market, this capital is usually allocated reasonably 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 situation, we might see some business models built on the assumption of continuously rising prices, leading to risk accumulation and ultimately market imbalance.
I still don't know specifically which sector will see this happen, but we have not yet reached the 'overheated' stage. Especially when traditional financial capital enters, excess investment may occur in certain areas, which is something investors need to be cautious of to avoid a 'reshuffle' when market prices become disconnected from reality.
Dreamer: Yes, when I hear you talk, I think that when people have many successful trades, they become bored and crave that feeling of quick profits again. There are currently many Bitcoin Layer 2 protocols announcing yield plans, but where does that yield come from? We don't want to repeat past mistakes of promising high returns without a solid foundation. Others may seek more trends to pursue large returns, which increases risk 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.
Casual chat about skiing.
This interview has been fantastic. We greatly appreciate your time. There's an IFC event tonight—a credit showdown, and I'm not sure if you and others have time to attend. It's a global event, and we hope to have the opportunity to invite you to participate in the future. I believe you will enjoy events like this, featuring influential figures in the crypto space. Now, I will hand the microphone back to Scott to conclude 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. 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 your work? Are you a food enthusiast? Do you look for new restaurants? Or do you have other ways to stay motivated?
Arthur: I absolutely love skiing. So I spend three to four months each year on the mountain, immersed in the snow. During the ski season, I ski for eight hours every day. Other than exercising and enjoying outdoor activities, I hardly do anything else. It makes me very happy.
Scott: What is your favorite ski destination?
Arthur: Japan's Niseko. Their powder snow is fantastic, dry, and light. It snows there from January to February every year, and it's simply amazing.
Scott: So you're preparing now? Getting in shape?
Arthur: Yes, I am preparing for skiing. However, the only downside of ski resorts in Japan is that the slopes are not steep enough; there aren't those very dramatic steep runs.
Dreamer: The ski resorts in Salt Lake City will have a lake effect. I live in Singapore now, but I used to live in the U.S. and went skiing often, although I'm a snowboarder.
Scott: Me too! Although I still ski, I prefer snowboarding. Some places are better suited for snowboarding.
Dreamer: Yes, some places are very suitable. You also won't encounter snowboarders 'trampling' your tracks on the slopes.
Scott: That's awesome! I haven't snowboarded in years, but it's something I've always wanted to pick up again. I'm from the Northeastern U.S., 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 not just a matter of packing the gear and driving a few hours to get there.
Scott: I hope you have fun in the coming time. I really want to go to Japan to experience the joy of skiing; I never realized it had such great skiing conditions. I definitely need to try it later.
Price predictions for Bitcoin at the end of this year and in 2025.
Scott: By the way, a specific question. What do you think the price of Bitcoin will be by 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 by the end of 2025, it could reach $250,000.
Scott: Did you hear? This is Alpha First's first forecast: Bitcoin's price will reach $100,000 by the end of the year and may reach $250,000 in a year. Perhaps we'll have the opportunity to go to DevCon and other events next year to verify this forecast again. I hope by then it's not just $250,000, but even higher.
[Disclaimer] The market has risks, and investments should be made cautiously. This article does not constitute investment advice, and users should consider whether any opinions, views, or conclusions in this article align with their specific circumstances. Invest at your own risk.
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'BitMEX founder reveals again! Cash out when it's time, Bitcoin will push towards 'this level' by the end of next year.' This article was first published in 'Crypto City'.
