BitMEX founder and veteran of the crypto space says that Americans are facing an imminent wave of inflation that will severely damage their savings.
In a new blog post, Hayes says that as the US loses dominance over the global economy, financial markets will balkanize into several blocs rather than make way for another hegemony.
As the dollar’s supremacy in global trade erodes, Hayes says that the government will go to great lengths to prevent capital flight to crypto and other assets.
“The West cannot allow general capital flight from its markets to places like crypto or foreign stock and bond markets. They need you, the reader, as exit liquidity. The colossal debts accumulated since WW2 (World War II) must be paid, and it’s time for your capital to be eviscerated by inflation. A capital flight would also definitely spell the end for the USD’s role as the global reserve currency.
As I mentioned [previously], the West cannot easily enact draconian capital controls because an open capital account is a prerequisite for the type of capitalism it practises. Even so, if the West starts to sense that a mass exodus of capital is on the horizon, it will almost certainly make it more annoying and difficult to pull money out of the system. If you believe my thesis, then you should start to see many of the world powers’ recent financial policy changes in a different light.”
The crypto billionaire also notes that the US is already making it harder to store money in decentralized crypto wallets, perhaps in anticipation of a potential exodus from the traditional financial system.
Hayes says that crypto and gold will move to the forefront of financial markets as investors and countries look to shield themselves from currency debasement. While the accumulation of the precious metal has already begun, Hayes says that Bitcoin (BTC) could be next.
“Moving forward, gold and crypto will be in focus. They are not tied to a particular country. They cannot be debased at will by a central bank desperate to prop up their financial system with printed fiat money. And finally, as countries start looking out for their own best interests rather than serving as slaves to the Western financial system, central banks of the global South will diversify how they save their international trade income.
The first choice will be to increase gold allocations, which is already underway. And as Bitcoin continues to prove it is the hardest money ever created, I expect that more and more countries will at least start to consider whether it is a suitable savings vehicle alongside gold.”
