Arthur Hayes’ first job was on a Deutsche Bank trading floor in Hong Kong. The day he started, in September 2008, Lehman Brothers filed for bankruptcy. He was 22.
The days of high-adrenaline trading and million-dollar bonuses came crashing to an end.
Risk-hungry young traders like Hayes were wiped out amid an onslaught of regulation, compliance departments, and staid office cultures.
Then he found crypto.
“When I read the Bitcoin white paper it really resonated with me in terms of my true philosophy — like the corrupt banking system and how bullshit it is,” he told DL News.
Fast forward a decade — a whirlwind that included co-founding the BitMEX crypto exchange and reaching billionaire status, as well as a guilty plea in the US and probation time — and the crypto industry is starting to look a lot like the banking industry he left behind.
‘It still has that energy of a really diverse group of people all around the world’
Arthur Hayes
Finance giants including BlackRock and Franklin Templeton now offer retail investors cheap and safe ways to invest in crypto.
Fidelity wants to put Bitcoin into American pensions.
Hayes says it’s still the same old industry.
“It still has that energy of a really diverse group of people all around the world who come either from a financial perspective or a tech perspective. And they want something different,” Hayes said from his office in Singapore last week.
“They want something with uncapped upside, obviously super volatile, and you can wash out pretty quick if you’re not diligent. But at least there’s an ability to generate, either extreme usage of your products, or extreme wealth.”
Hayes has the credibility of a crypto OG.
He’s also become one of the most prolific and widely followed market commentators, on crypto and beyond.
Hayes chatted with DL News — before Monday’s market crash — about the election, the finance industry’s embrace of crypto, and where he sees Bitcoin’s price.
On the election
AH: They think Trump says the right things and so he’s going to make it happen faster. [Donald] Trump or [Kamala] Harris, it doesn’t matter.
DLN: Why?
AH: Yes, crypto donates a lot of money. But I don’t think you’ve donated enough to outpace a JPMorgan, a Morgan Stanley, a Citibank, a Goldman Sachs.
And if you think about who is staffed and all of these agencies, it’s all people who came from these banks.
So while it’d be great if Trump got elected and he did all these things, I think he might run into the same problem he ran into his first term.
You can say all these nice things and try all these policies, but if the entire government organisation is opposed to them, then nothing gets done.
On Bitcoin and monetary policy
AH: Both the Trump administration or Harris administration will print the money. They do it in different ways. But the money will be printed.
And so your crypto is going to go up — the path could be very wonky, but at the end of the day, we know where it’s going.
On SEC Chair Gary Gensler
DLN: US Securities and Exchange Commission Chair Gary Gensler seems to be a big boogeyman in the industry. Do you share a lot of those opinions?
AH: People are getting confused with the symptom rather than the issue. You can listen to his lectures, he’s a very intelligent person. And when he’s in government office, complete nincompoop.
It’s just the politics. And you could replace him with somebody else. Gary Gensler’s not the problem. The SEC isn’t the problem either.
Firing Gary Gensler isn’t going to do anything, if the slate of regulations that you were unhappy with to begin with are still in place because your elected representatives chose to think about other things rather than creating a framework for crypto.
People are getting all worked up about Gary Gensler, but he kind of is irrelevant.
On plans for a Bitcoin reserve
AH: I find it almost impossible that that will get done, even if Trump is elected.
You’re going to need to have a certain amount of people vote for this and if, you know, this is going to somehow negatively impact the US Treasury or Fed or visibility to maintain a US Treasury market.
DLN: Do you think that it’s a good idea, even if it won’t get done?
AH: Oh, it’s a great idea. The US should weaken the dollar and buy Bitcoin and gold at the end of the day. It would solve a lot of their problems.
They will weaken the dollar and Bitcoin and gold will go up.
Do I think that the US government is going to proactively try to acquire Bitcoin? Highly doubtful. They would buy gold before they bought Bitcoin.
But it’s the same trade. It’s the same motivation for why we’re doing it.
On BlackRock in crypto
AH: The whole point of crypto is that there’s no barriers to entry.
A BlackRock should be able to use Bitcoin and somebody who has no financial services in the Philippines should be able to use crypto.
Is the incentive structure strong enough? And the game theory behind how the blockchain works and all that sort of stuff to make sure that centralisation doesn’t occur — and if it does, is there a consequence for that?
I’ve written a bit about like, Oh, no … the passive disease, will it infect crypto, and they’ll take all the Bitcoin and then ossify the network and all that kind of stuff, right?
Theoretically, yes, it could happen. But it’s still an open playing field.
If you own a BlackRock product, you own a derivative of crypto, you don’t own crypto — BlackRock owns your crypto.
And so the BlackRock product is a sexy product for people because it’s easy, but it also isn’t crypto.
On Bitcoin’s price
AH: The Bitcoin price in this cycle is going to go very, very high. Hundreds of thousands of dollars, maybe $1 million.
There’s so much debt that needs to be rolled over. We’re entering a period where the global monetary architecture is completely changing.
We don’t know what it’s going to be, but the people who have made the most of the last 80 years are going to be very resistant to change.
Trista Kelley is DL News’ Editor in Chief. Got a tip? Email at trista@dlnews.com.
