The 'kiss of death' of Bitcoin? Arthur Hayes warns about the recession

In his last blog post, entitled “Kiss of Death”, the former CEO of Bitmex, Arthur Hayes, describes a provocative thesis on the trajectory of bitcoin and the largest financial markets under the renewed presidency of Donald Trump. Hayes, who for a long time has had bullish opinions about cryptography, argues that a convergence of fiscal and monetary policies could catapult the price of bitcoin up to $ 1 million during the era of Trump 2.0, but only after a period of turmoine turmoine driven by recovery.

Breaking the “kiss of death” by bitcoin

Of Hayes's structure Turn around the principle of “kiss”, keep it simple, stupid, market participants to stay focused on the central driver of assets prices: liquidity. Instead of exaggeratedly reacting to sensational holders, he argues that one must monitor changes in the amount and price of money (that is, how much credit is already created what interest rate).

“One day, buy and then sell quickly after digesting the next head,” says Hayes. “The market cuts you in the process, and your battery decreases rapidly.” Recommends staying to a simpler perspective: if the US government. Print significant amounts of money at lower rates, risk assets such as bitcoin can increase.

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A key premise of Hayes's analysis is that President Trump, a “real estate showman” of background, debt will finance his “America First” agenda instead of adopting austerity. Hayes contrasts to Trump with Andrew Mellon, secretary of the transa under Herbert Hoover, who supposedly declared: “Liquidate labor, liquidate actions, liquidate farmers, liquidate real estate. It will purge the rot of the system. “

Hayes argues that such a position would be a political suicide for a president who seeks to be seen as Franklin D. Roosevelt of the 21st century instead of Hoover. As Hayes says, “Trump wants to be considered the best president of history” and, therefore, is inclined to loosen credit conditions instead of tightening them.

Hayes highlights Trump's unconventional maneuver to reduce federal expenditure and potentially triggers a recession, thus forcing the Federal Reserve to respond with fare cuts and fresh liquidity. The newly formed government efficiency department (Doge), led by high profile businessman Elon Musk, is portrayed as an aggressive effort to expose fraud and reduce waste in government programs.

You have quotes Dege's claims that Social Security payments can be with dead people or unseatified identities, supposedly costing hundreds of billions, or even a billion owners a year. “Trump and Dege are shooting hundreds of thousands of government employees,” says Hayes, referring to media reports that cite high claims unemployed in the Washington area, DC.

By reducing federal budgets so drastically and so fast, Trump could, in the words of Hayes, “cause a recession or convince the market that one is just around the corner.”

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Once signs of recession appear, Hayes predicts that the president of the Federal Reserve, Jerome Powell, will have few more options than reducing the rates, finishing the quantitative tightening (QT) and potentially restarting quantitative flexibility (QE) to avoid a generalized financial crisis. Powell, whom you are calling a “serious traitor” (a reference to the fed past tariffs during the Kamala Harris campaign), is bound by the Fed mandate to maintain economic stability.

Hayes points to $ 2.08 billion in the US corporate debt. UU. And $ 10 billion in the US Treasury debt. UU. Which must transfer in 2025. If the economy slows down, the debt at high interest rates becomes unfeasible. In that scenario, the only salvation of the Fed is the creation of fresh money and the lowest rates.

Hayes estimates that a complete Fed response, which covers several policy changes, could lead to up to $ 2.74 to $ 3.24 billion in a new liquidity: the fall in the federal fund rate of 4.25% to 0% could be equivalent to approximately $ 1.7 billion printing of money, according to Hayes estimates.

Currently, the Fed conducts $ 60 billion per month in QT. If the QT ends in April 2025, you have sees a liquidity injection of $ 540 billion in relation to previous expectations. Additional treasure purchases by commercial banks of the FED or the United States (the latter helped by a relaxation of the supplementary leverage relationship) could add another $ 500 billion to $ 1 billion in credit in dollars.

Compare this with the $ 4 billion in stimulus measures during the COVID-19 pandemic. Since bitcoin jumped approximately 24x of its minimum 2020 to 2021 maximums in response to that liquidity wave, Hayes says that even a more conservative multiple could be at stake. “For those who ask how we reach $ 1 million in bitcoin during Trump's presidency, this is how,” he proclaims, linking the massive credit creation with a very high btc price.

Despite its long -term bullish forecast, Hayes believes that bitcoin's immediate perspective can be rocky. Hayes sees bitcoin's potential to visit the range of $ 70,000 to $ 80,000 in the short term, levels that are remarkably above the historical maximum of the previous cycle but still below the current market. “If bitcoin leads the market in the inconvenience, he will also do it up,” writes Hayes, stating that btc often takes a walk before traditional actions.

He quotes the important period at $ 110,000 around mid -January (Trump opening timeline) followed by a setback to $ 78,000 at the end of February. “bitcoin is shouting that a liquidity crisis is close, despite the fact that US stock market rates are still close to their maximums of all time,” he says. “I firmly believe that we are still in a bull cycle and, as such, the background in the worst case will be the historical maximum of $ 70,000 of the previous cycle,” says Hayes, underlining his conviction that any important fall is opportunities to accumulate instead of selling panic.

In Hayes's opinion, the “kiss of death” is not about bitcoin's disappearance, but about the obsolete fiduciary system that struggles to contain spiral debt loads and political Brinkship. He argues that short -term chaos in traditional markets, activated by Doge -driven expenses and a hesitant Fed, will finally search the way for a new round of monetary expansion.

The final result? Hayes insists that staying focused on liquidity is the best strategy: “Let politicians do political things, remain in their lane and buy bitcoin.”

At the time of publication, btc quoted at $ 83,725.

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