What happens when the world is imprisoned in endless wars, drowning in debt and are not willing to raise taxes? According to Arthur Hayes, it is the scene for one of the greatest crypto rallies in history.
Summary
- Arthur Hayes sees spending on the shortage of wartime and the liquidity of the central bank as important catalysts for crypto.
- He predicts that Bitcoin will reach $ 250k and Ethereum $ 10k by the end of 2025.
- According to him, Crypto remains the clearest hedge against currency debits and sovereign debt crises.
Hayes outlined his macro thesis in a July 23 articleBy predicting that Bitcoin (BTC) could reach $ 250,000 by the end of 2025 and Ethereum (ETH) could reach $ 10,000. He argues that both military expenditure and strategic business investments produce the US economy to a period of wartime-like credit expansion.
This increase in liquidity, he says, will find his way to assets that are scarce, worldwide and accessible, such as crypto. Instead of seeing inflation as a threat, Hayes regards it as the fuel for the next crypto -bull run.
A credit cycle turned out to be done could improve crypto
Hayes sees the current geopolitical order, in particular the growing wars in Ukraine and the Central East, as a catalyst for runaway government loans. With reference to the US Defense Budget, which extended $ 1 trillion and programs in Europe and Asia in 2024, he describes a global environment for aggressive tax expansion.
This increase in government spending, he notes, will not be financed by higher taxes, but by balances in the central bank. Since the real interest rates are negatively forced to keep the debt service sustainable, Hayes believes that inflation will restore and risk assets such as crypto benefit the most.
Hayes compares it with a new type of quantitative relaxation that subtly increases asset prices and at the same time leads capital to politically supported sectors. He believes that Crypto is one of the few places where this surplus money can flow without causing social unrest.
In contrast to food or housing, where rising prices harm the average person, Bitcoin and Ethereum benefit from inflation without recurring. In his words, crypto becomes the perfect ‘escape valve’.
Regulation and institutional adoption in favor of Crypto
Hayes also notices on a changing regulatory environment. With the growing Bipartisan support for crypto, pension funds that open to digital assets and institutional players that increase their involvement, the market can be about to be a new phase of adoption.
The second presidency of Trump, he suggests, could accelerate this trend through tax stimuli and clearer regulations. The view that the supply of cryptocurrency has been established, while the delivery of Fiat -Vuvuuta is rapidly expanding is in the core of Hayes’ perspective.
