Arthur Hayes Advocates Doubling Down on Cryptocurrencies Over Fiat

Arthur Hayes, the colourful co-founder and former CEO of crypto exchange BitMEX, said now is the time to suppress your inner “beta cuck loser” and go full FOMO into crypto. 

Hayes recommended what he calls a “left curve” strategy — referring to the left side of the IQ bell curve — essentially encouraging investors not to overthink, keep it simple, and buy and hodl crypto.

The former BitMex CEO said the lead up to the US election later this year will create perfect macro conditions for a huge crypto bull run, with the money printers working overtime to fund election promises in what he says is a crucial winner-takes-all election year.

Related: Arthur Hayes Warns Bitcoin May “Slump” Post Halving, Plans Trading Hiatus Until May

Hays: Negative Bond Real Yields Have Driven Bitcoin Price and This Will Only Continue

The rise and rise of Bitcoin over the past 15 years has been driven largely by a macroeconomic situation in the US which has resulted in negative real yields for US government bonds, according to Hayes. This has made bonds an unattractive option for most investors, and has incentivised investment in other assets, such as crypto. 

Real yield in this context refers to 10-year government bond yield minus gross domestic product — essentially meaning bond yields are lower than GDP.

Hayes argues these negative bond yields have been able to persist because the US government has consistently printed money, effectively allowing it to borrow at negative rates. This has resulted in an ever increasing supply of US dollars, further contributing to Bitcoin’s price growth relative to the US dollar as Bitcoin’s supply remains finite.

So that explains what’s happened in the past, what about a prediction for the future? Hayes says in order to win this year’s election, both candidates are promising all sorts of goodies for the electorate without accompanying tax increases. He thinks this will mean further, and possibly even more aggressive, quantitative easing to pay for this “free shit”:

When the easy and obvious growth-supporting policies have been enacted, politicians reach for the printing press to funnel money to their preferred constituency at the expense of the entire populace. Politicians can offer their supporters free shit as long as the government borrows at a negative real yield.

Arthur Hayes, Co-founder of BitMEX

He goes on to say the contentious political situation in the US and the sense that this election is a win-at-all-costs situation for both sides makes him very confident that whoever wins will engage in aggressive money printing to pay for their promises:

The political situation in the US gives me extreme confidence that the money printer will go Brrrr. If you thought it was absurd what the US monetary and political elite did to “solve” the 2008 GFC and COVID, you ain’t seen nothing yet.

Arthur Hayes, Co-founder of BitMEX

Related: Donald Trump Nearly Endorses Bitcoin: “I Can Live With It” 

Hayes concludes with a clarion call to degens everywhere:

Whatever the flavour of crypto risk excites you, the next few months will present a golden opportunity to add to positions. Calling all degens to the Left Curve. Your hunch that money printing will accelerate as politicians spend money on handouts and wars is correct.

Arthur Hayes, Co-founder of BitMEX