原文标题：Arthur Hayes: 'If They Go 50, That Will Be a Nuclear Catastrophe for Financial Markets'
Original author: CoinDesk Staff
Original source: https://www.coindesk.com
Compiled by: Mars Finance, Eason
In an interview with CoinDesk’s Markets Daily, BitMEX co-founder and Maelstrom CIO Arthur Hayes discussed the impact of the Federal Reserve’s rate cuts, how he sees the cryptocurrency market moving this year, and why he invested in Bitcoin Ordinal and Inscription.
Arthur Hayes, co-founder of BitMEX and CIO of Maelstrom, spoke with Markets Daily host Jennifer Sanasie and CoinDesk executive editor of technology and protocols Brad Keoun to share his thoughts on whether a 25 or 50 basis point rate cut by the Federal Reserve will lead to financial turmoil or a short-term rebound. He also discussed the possible impact of government spending, inflation and the reliance of major economies on the fiat monetary system, as well as the dynamics of Bitcoin relative to traditional markets. The following transcript has been lightly edited for brevity and clarity.
Today the US Federal Reserve holds its meeting. What do you think we will see? How will it affect the market?
Arthur Hayes:
So, the question is whether they are going to raise rates by 25 basis points or 50 basis points. I don't think they should raise rates. I believe the U.S. economy is pretty strong. If you look at the GDP numbers for the last eight or nine quarters, it's been growing consistently. The U.S. government continues to spend huge amounts of money and keep the economy growing very fast. Obviously, this helps the reelection chances or the election chances of Kamala Harris and her running mate, which I think is the goal of the current Democratic administration.
So when the government is spending huge, the Fed cuts rates and inflation is above their target - which I think is a mistake. If they decide to keep cutting rates, inflation will accelerate in the fourth quarter. I think if the market starts to falter, the Fed's response will be that they will just cut rates more and make the problem worse.
So if they cut rates 25% or 50%, the market is going to react the opposite of what they think it will. I think everybody believes that the market is going to go up. The more they cut rates, the more the market is going to go up, the more stocks, bonds, crypto, whatever. I actually take the opposite view, you know, the more they cut rates, the less the market is going to like it. Maybe one or two trading days from now, it will happen, but they're not going to learn their lesson. They're just going to keep cutting rates. So we're going to have a very rapid rate cut cycle, that's my view.
Sanasi:
Let's go a little deeper. Let's say they cut interest rates. How do you think the market will react? More specifically, how do you think the cryptocurrency market will react?
Hayes:
So I believe, and I've written extensively about this, that the most important macroeconomic variable is the USD/JPY exchange rate. So the USD weakened substantially because the Bank of Japan cut rates to zero or negative and the Fed and all the other major central banks started raising rates starting in March 2022, so the spread widened substantially. USD/JPY went as high as about 162. And then something happened. The Fed signaled that it was ready to start cutting rates this summer. The Bank of Japan said it would start raising rates and did a 15 basis point increase on July 31. We saw that in the subsequent week, global markets fell 10%. If the Fed had raised rates by 25 or 50 basis points, then the USD would have fallen. In subsequent meetings, the USD/JPY exchange rate would have continued to narrow. USD/JPY would have continued to strengthen, the yen would have strengthened, the real nominal value would have fallen, people would have continued to liquidate positions, which removed leverage from the system, stocks fell, and I think yields would have risen. I think crypto is still to be determined.
Cohen:
So what do you think about Bitcoin? Will the decoupling happen immediately or at some other time?
Hayes:
I don’t think that’s going to happen immediately. I think if we get a massive sell-off, people are going to sell what they can, not what they want. Bitcoin is a very liquid asset. People have a lot of illiquid assets on their books, especially if you’re an investment manager. So if you have some Bitcoin, you’re going to sell it. If the basis goes down further than it is right now, that’s the difference between Bitcoin and futures contracts. You’re seeing big hedge funds like Millennium and these shops that do this basis trade, starting with the launch of the ETF earlier this year. They’re closing out their positions and selling spot Bitcoin into a very illiquid market. So I think Bitcoin is going to go down with the rest of the market. But pretty soon, when we see a financial collapse early on, Bitcoin is going to say, “Well, I believe the market will respond positively to more money printing.” [Treasury Secretary] Janet Yellen and [Fed Chairman] Jay Powell can’t afford a financial collapse a few weeks before the election, especially if they want Harris to beat Donald Trump.
Cohen:
I don't want to be too dramatic, but Bitcoin is around $60,000 right now. You know, if we get $50, where is Bitcoin going to go? If we get $25, where is Bitcoin going to go? Do you have any specific predictions?
Hayes:
I think if rates go to 25, no, no, not much will change. I think everybody expects rates to go to 25. I think if rates go to 50, it will be a nuclear disaster in the financial markets. You will see a big rally in the stock market one or two trading days after a rate cut because everybody thinks the more rates go down, the better. But actually I think it shows a deeper corruption in the global financial system. And that will cause prices to fall sharply after the fact.
Sanasi:
Samson Mow recently predicted on Markets Daily that the price of Bitcoin will reach $1 million by 2025. The video has received a lot of positive response from CoinDesk viewers, with high engagement. What do you think of this prediction? Will the price of Bitcoin reach $1 million next year?
Hayes:
Sure, but I don't think so. I still have a million-dollar price target. I'm more bullish on 2026 or 2027. Next year, whoever wins the U.S. election, we're going to have a big increase in fiscal spending. If the dollar falls a lot, then there's also room for China to do stimulus and keep the yuan stable. And then the other major central banks will follow the Fed's lead. They're watching the Fed; they're easing policy, so we can also ease policy. We can do a lot of things like the Fed, and our exchange rate won't be destroyed. So I think that will happen once a new president is elected, no matter who is the president of the United States, because both Harris and Trump are committed to spending a lot of money. Trump is committed to tax cuts, Harris is committed to welfare payments.
Cohen:
Arthur, I was listening to your podcast a while ago and you talked about what you think of this cycle as the sovereign default cycle. I'm curious, when you talk about cycles, what cycle are we in now and how long is this cycle?
Hayes:
I don't really know how long this cycle is. It depends, but I believe it. If you think about the global reserve currency, the dollar, and all the wars and all the spending that's needed to keep the system intact, we're on a precipice, and you can go either way. You can have massive austerity, massive deleveraging, maybe even a revolution, or the authorities can appease voters by fixing government bond prices and printing as much money as they can to keep things stable, whether it's in the US, the EU, China, or Japan. Every major economic bloc or country runs a similar fiat-fractional-decentralized financial system, whether they're democratic, authoritarian, communist, capitalist, or whatever. It's all smokescreen. At the end of the day, everybody's printing money. Everybody has a fiat-fractional-decentralized banking system. Everybody needs inflation. Everybody needs to take away the wealth of their savers. That way, governments can afford their spending plans, whether it's financing wars or implementing a Green New Deal, or for onshore production or climate change policies, or for welfare benefits to the poor who are losing out in economic transition, artificial intelligence, and all that kind of thing. There are many reasons why governments need to spend money instead of tightening their belts and restore people's confidence in these fiat currencies we have now.
Cohen:
The question is, can they continue to do so?
Hayes:
Sure, Bitcoin could go to 1 million, or even 10 million. Bitcoin's market cap is $1.7 trillion. It's this magical internet money that was created out of thin air starting in 2009. Bitcoin is the antidote to all of this. Yes, they've printed a lot of money around the world, and the U.S. has done the worst job of that. And Bitcoin is the response to that. We have this cryptocurrency ecosystem that thrives on all of this money being printed. We have all these different types of assets that are created and have value because we have such a messed up financial system. So, I say they get away with it. Bitcoin is a smoke alarm. It tells us that something is wrong here.
Sanasi:
When you look at the cryptocurrency market, when you look at the commentary around the cryptocurrency market, and I know you create a lot of your own content, you participate in a lot of content like this podcast, what is it that people don’t talk about enough?
Hayes:
Patience. I think everybody is thinking, Bitcoin has to go to $1 million today, next year, because I'm using a lot of leverage, or my entire net worth is in this particular cryptocurrency. They hear these things, the impending collapse, all the debt. They're asking, why hasn't it happened yet? Why not now? I see all these things. I believe what you're saying. It's terrible. Politics is screwed. Finance is screwed. Why isn't Bitcoin reacting? Or why isn't the cryptocurrency that I own reacting? I think it's just patience, right? Over a decade later, we've created a whole new financial ecosystem. Millions of people around the world have wallets for Bitcoin, Ethereum, Solana, etc. It's been a very successful financial experiment so far, but it's not going to suddenly go up to ridiculous levels just because you have a lot of leverage or bought a lot of money yesterday. So, I think people need to understand patience, because if you believe in math and the law of compound interest, then patience is inevitable. The system has to print money, it has to devalue money to survive, and every other major civilization has done the same thing. Eventually, inflation will get to people and some kind of revolution will happen. So history is 100 to 100. Just wait and see.
Cohen:
Arthur, I want to talk about one specific market factor that has emerged this year, which is all of these ETFs. You actually traded ETFs before at Citigroup. So I'd love to hear your thoughts on that. I just listened to another podcast where you talked about the role and dynamics of market makers, but I'm just curious, in general, how do you feel about ETFs being a major factor in this market right now?
Hayes:
So I think, at the end of the day, ETFs are for people who want the performance of the price of Bitcoin. They don't want to own Bitcoin. They don't want to be their own financial institution. They want to outsource that work to Larry Fink, BlackRock, and all the other major institutions, and that's fine. Bitcoin can do whatever you want with it. What does that mean? You're a passive investor, you don't actually use the protocol. So if we take this to an extreme and every Bitcoin is owned by BlackRock or an institution like that, then the network goes to zero because nobody's actually using it. So Bitcoin is valuable because we use it. It's not like gold. I can store gold in a vault to return it, and it's still gold, so it's the chemical properties of gold. If I don't do anything with Bitcoin, then the miners don't get paid, and the network collapses. That's a fundamental, very subtle difference between Bitcoin and gold, and I don't think it's a problem right now. It may be a problem in the future. But at the end of the day, if you're thinking right now why, why did BlackRock get their ETF approved in six months, and the Winkle Clowns couldn't get it approved in 10 years? Right? Live in New York. They are all billionaires, all very wealthy. Why didn't they get one, and BlackRock got one in six months? Well, at the end of the day, you want the same financial institutions to control wealth that can eventually be taken away by the government in one fell swoop. BlackRock is just another arm of the US government, just like any other large Chinese asset manager is an arm of the Chinese government.
Sanasi:
If people don't use Bitcoin, the value of Bitcoin will drop to zero. Bitcoin is not working the way everyone in this industry wants it to. Tell me about what's going to happen in the future. If this happens and people stop using Bitcoin, what will be the problem?
Hayes:
Miners' revenues seem to be going down. How can they afford the capex? Difficulty adjustments, things like that. I mean, if we don't have any use cases for Bitcoin, I think this is a very long-tail situation. Obviously, that's why I like things like Ordinals and the Bitcoin 2D Layers paper. Like let's pay miners, let's do something with this thing and create some usability for people so that... people will use it, people will spend money, and we'll solve this problem and eliminate it as a problem for the future.
Cohen:
You did some really interesting things this year at Maelstrom, which is your family office, your investment fund, right? You launched Ordinal's Inscription line, Airheads, which is interesting, by the way.
Hayes:
Thanks. I guess I'm a flexible money enthusiast, an avid sh&t money enthusiast. But if I think about my categorization of cryptocurrencies, Bitcoin is money. No other cryptocurrency is money. It's the hardest money we've ever created in human history. Bitcoin cares about the security of the network. Bitcoin cares about the immutable blockchain. Ethereum is not money, no matter what people say. They decided they were not going to be money anymore in 2016 when the community allowed a hard fork to pay back the people who hacked the Dow Jones. Ethereum wants to be the best decentralized computer ever. And so far, it has done that. I put Solana in that camp. Obviously, I'm a big fan of Aptos right now. They're trying to get into that space as well. And then you have a lot of other applications. They want to do something on these networks, and I'm very interested in decentralized finance because I believe that the rest of the world should be able to easily get financial products with the internet and the click of a few buttons, and that's not the case for most people outside of the United States and Western Europe. Their financial system is pretty messed up. That's why DeFi makes a lot of sense for these people. So I like all of this stuff. It's all an experiment. You know, some of these things are 10 years old, Bitcoin is 15 years old, and other things are less than a year old. But we are trying to create a completely new system where anyone with an internet connection can choose how to save, how to invest, how to express their culture through the internet.
Cohen:
As for your NFT collection, why did you choose to join Bitcoin now, what is the inscription of Ordinal, what was the idea at the time, or what is your goal for the project?
Hayes:
So we are investors in Oil Wallet, and…
Cohen:
Yeah, by the way, I met one of their guys at the Bitcoin Parthenon meetup in Nashville. We chatted for a while. But anyway, go ahead.
Hayes:
Yeah. We're investors in this wallet, how do we create some buzz for Ordinals? Okay, let's do an Ordinals drop. Now I don't want to do another, you know, PFP 10,000 AI-generated collection. We've done that many times. So what can we do that's unique to Ordinals that you can't do on any other protocol? So it's doing the recursive inscription thing. We want to show artists and creative people, see what we've done here. I don't actually care what happens to the price of this stuff. I just want to see people inspired to do other things and show what the oil wallet is capable of. This is what you can do with it and show what Ordinals is capable of. What kind of creative minds can create something completely unique that can only exist on Ordinals further away.
Cohen:
OK, got it. Yeah, this is really interesting.
Hayes:
That's the real goal. Of course, I hope that these fools will all become very, very valuable in the future, but the real goal is to inspire other people to create other kinds of derivative works using ordinals and inscriptions.
