By Trista Kelley, DL News
Compiled by: Ismay, BlockBeats
Editor's Note: Arthur Hayes discussed the current situation and future trends of the cryptocurrency field, analyzed the impact that Trump and his policy tendencies may have on the cryptocurrency field, and emphasized how different political leaders affect the future development of cryptocurrency. He also talked about the impact of large financial institutions such as BlackRock entering the crypto market. He believes that whether the cryptocurrency market can still maintain its original intention and avoid leaning towards the centralization of the traditional financial system has become a question worthy of attention. In addition, Hayes expressed extremely high expectations for the future trend of Bitcoin prices, believing that the huge changes in the global monetary system will greatly increase the value of Bitcoin.
Arthur Hayes' first job was on the trading floor of Deutsche Bank in Hong Kong. The day he started in September 2008, Lehman Brothers declared bankruptcy. He was 22.
Those days of adrenaline-filled deals and million-dollar bonuses came to an abrupt end.
Young traders with a risk appetite like Hayes are swept away by an onslaught of regulation, compliance departments and a stuffy office culture.
Then he discovered cryptocurrency.
“When I read the Bitcoin whitepaper, it really hit home with me about real philosophical things in my head — like the corrupt banking system and how bullshit it is,” he told DL News.
Fast forward a decade — a journey that included co-founding the BitMEX cryptocurrency trading platform and reaching billionaire status, as well as a guilty plea and probation in the United States — and the crypto industry is beginning to look more and more like the banking industry he left.
Financial giants including BlackRock and Franklin Templeton now offer retail investors low-cost, secure ways to invest in cryptocurrencies.
Fidelity Investments wants to include Bitcoin in US pension plans.
It’s still old business, Hayes said.
“It still has this really diverse group of people who come from all over the world, who are either from finance or technology. They want different things,” Hayes said last week from his office in Singapore.
“They want something that has unlimited upside, which is obviously super volatile and will get wiped out very quickly if you’re not diligent. But at least has the ability to generate extreme product usage or extreme wealth.”
Hayes has the credibility of a cryptocurrency veteran.
He has also become one of the most prolific and widely followed market commentators, covering cryptocurrencies and beyond.
Hayes chatted with DL News before Monday’s market crash to talk about the election, the financial industry’s embrace of cryptocurrencies, and his thoughts on the price of Bitcoin.
About the election:
AH: They think Trump is right, so he will make things happen faster. Whether it's Trump or Harris, it doesn't matter.
DLN: Why?
AH: Yes, cryptocurrencies donate a lot of money. But I don’t think your donations are as high as JPMorgan Chase, Morgan Stanley, Citibank, Goldman Sachs, etc.
And if you think about who works in these institutions, it's the people who come from these banks.
So while it would be great if Trump were elected and he did all of these things, I think he would probably run into the same problems he had in his first term.
You can say all these nice things and try all these policies, but if the entire government apparatus is against them, nothing will get done.
On Bitcoin and monetary policy:
AH: Both the Trump and Harris administrations will print money. They will do it in different ways, but money will still be printed.
So your cryptocurrency price will go up – the path may be very tortuous, but at the end of the day, we know where it’s going to go.
About SEC Chairman Gary Gensler
DLN: SEC Chairman Gary Gensler seems to be a big bogeyman in the industry. Do you resonate with these views?
AH: People confuse the symptoms with the problem. You can listen to his lectures, he's a very smart guy. But when he's in government office, he's a complete fool.
It's just politics. You can replace him with somebody else. Gary Gensler is not the problem, the SEC is not the problem.
Firing Gary Gensler will change nothing if a set of regulations you were originally unhappy with remain in place because your elected representatives chose to consider other things rather than creating a framework for crypto.
People make a fuss about Gary Gensler, but he doesn’t really matter.
About the Bitcoin Reserve Program
AH: Even if Trump were elected, I almost think it would be impossible to accomplish.
You need a critical mass of people to vote for this if it's going to have a negative impact in some way on the U.S. Treasury or the Federal Reserve System or maintaining visibility in the U.S. fiscal markets.
DLN: Even if this plan doesn't work, do you think it's a good idea?
AH: Oh that's a great idea. The US should weaken the dollar at the end of the day and buy Bitcoin and gold, that will solve a lot of their problems.
They will weaken the dollar and the value of Bitcoin and gold will rise.
Do I think the US government will actively try to acquire Bitcoin?
I doubt they will buy gold before buying Bitcoin.
But it's the same deal, and it's the same motivation for us to do this.
On BlackRock’s foray into cryptocurrencies
AH: The whole point of cryptocurrency is that there are no barriers to entry.
An institution like BlackRock should be able to use Bitcoin, and people without financial services in the Philippines should be able to use cryptocurrencies.
Are the incentive structures strong enough? Are the game theory and all these things behind the way blockchain works strong enough to ensure that centralization doesn’t happen — and if it does, are there consequences?
I wrote some stuff like, they're going to take all the Bitcoins and ossify the network and things like that, right?
In theory, yes, this could happen, but it would still be an open competitive market.
If you own a BlackRock product, you own a cryptocurrency derivative, you don’t own the cryptocurrency – BlackRock owns your cryptocurrency.
So BlackRock's product is a sexy product to people because it's simple, but it's also not a cryptocurrency.
About the price of Bitcoin
AH: The price of Bitcoin during this cycle will be very, very high. It could be hundreds of thousands of dollars, or even $1 million.
There is so much debt that needs to be rolled over that we are entering a period of complete change in the global monetary system.
We don’t know what it’s going to look like, but the people who have benefited most from the last 80 years are going to be very resistant to change.
