Arthur Hayes, former CEO of BitMEX, a prominent cryptocurrency exchange, recently shared his point of view, signaling a watershed moment for bitcoin (btc).
In a world facing increasing geopolitical tensions and economic uncertainties, Hayes has delved into how these macroeconomic factors may affect bitcoin‘s trajectory. His recent blog post, “The Periphery,” sheds light on the potential future that bitcoin is hinting at.
Wartime Economics and the Rise of bitcoin
Hayes highlights the geopolitical risks posed by the United States’ growing involvement in two new wars. According to the former CEO of BitMEX, the ripple effects of such escalations could have huge implications for the global economy.
Linking this to the domestic financial scenario, Hayes points to the notable cessation of interest rate increases by the US Federal Reserve despite looming inflation. Hayes identifies this as a possible “steep downhill” for the economy when long-term interest rates rise faster than short-term interest rates.
Hayes further clarifies the intricate relationship between the structural hedging needs of banks and the borrowing needs of the US war machine, both interrelated in the US Treasury market.
The former CEO makes a thought-provoking argument: If long-term U.S. Treasuries don’t offer the security investors traditionally expect, where will the money flow? Hayes further posits that assets such as gold, and more importantly bitcoin, would rise driven by genuine fears of a “wartime global inflation.”
bitcoin response to geopolitical instabilities
Hayes notes that gold and bitcoin are experiencing bullish momentum, which contrasts with a sharp sell-off in “long-term U.S. Treasuries.”
The former BitMEX CEO emphasizes that this move is not a speculative response to potential spot exchange-traded fund (ETF) approvals. Instead, bitcoin is a “barometer,” indicating an impending “global wartime inflationary situation.”
One of the high points Hayes touches on in “The Periphery” is the possible eventuality that the Federal Reserve will no longer mask the true nature of the US Treasury market.
According to Hayes, instead of presenting it as a free market, it would reveal its genuine form: a “Potemkin village” where the Federal Reserve sets interest levels according to political expediency.
As Hayes revealed, this epiphany would be a pivotal moment, propelling bitcoin and the broader crypto market into a full-blown bull phase. The former CEO of BitMEX further concludes: “This is the trigger,” suggesting a strategic shift from short-term US Treasuries to cryptocurrencies.
When Hayes published “The Periphery”, bitcoin continued to move in an uptrend. The asset is up 2.6% in the last 24 hours and more than 20% last week. btc is trading at $34,890 at the time of writing.
Featured image from iStock, chart from TradingView
