Author: Trista Kelley, founding editor of DL News; Translation: Jinse Finance xiaozou
Arthur Hayes’ first job was on the trading floor of Deutsche Bank in Hong Kong. He was just 22 when Lehman Brothers filed for bankruptcy in September 2008. The days of heady trading and multimillion-dollar bonuses came to an abrupt end.
Young traders like Hayes, hungry for adventure, were worn down by regulation, compliance departments and the culture shock of a straitlaced office. Then he discovered cryptocurrencies.
“When I read the Bitcoin white paper, it really resonated with me and resonated with some of the things that I was thinking about — like how a corrupt banking system is ridiculous,” he told DL News.
Ten years later, he became the co-founder of the Bitcoin exchange BitMEX and a billionaire. He pleaded guilty in a US court and was sentenced to six months of home confinement and two years of probation. The cryptocurrency industry began to look a lot like the banking industry that he once sneered at.
“ It still has a real global and diverse community dynamic. ” — Arthur Hayes
Financial giants including BlackRock and Franklin Templeton are offering retail investors cheap and secure ways to invest in cryptocurrencies. Fidelity wants to put bitcoin into U.S. pension funds. “It’s still the same industry,” Hayes said.
“It still has this real global, diverse group of people who are either from finance or technology. They want something different,” Hayes said last week from his office in Singapore.
“What they want is unlimited upside, which is obviously very volatile and if you’re not diligent, you’ll be out of the game very quickly. But at least there’s the ability to either get your product pretty widely used or get pretty rich.”
Hayes has the credibility of a crypto OG. He has also become one of the most prolific and well-watched market commentators on cryptocurrencies and more. Before the stock market crash on Monday, Hayes spoke with DL News about the election, the financial industry's adoption of cryptocurrencies, and his thoughts on the price of Bitcoin.
1. About the US election
Arthur Hayes : They think Trump is right and he's going to move things forward quickly. But whether it's Donald Trump or Kamala Harris, it doesn't really matter.
DLN : Why do you say that?
Arthur Hayes : Yes, there is a lot of money in crypto funding. But I don't think crypto funding is enough to surpass JPMorgan Chase, Morgan Stanley, Citibank, and Goldman Sachs. If you look at the employees of these institutions, they are all from these banks. So if Trump is elected and he does what he says, that would be great, but I think he would probably have the same problems as his first term. You can talk all the nice things and try all these policies, but if the entire government agency is against it, then in the end, nothing will be done.
2. About Bitcoin and Monetary Policy
Arthur Hayes : Both the Trump and Harris administrations will print money, but they will use different methods. So your cryptocurrency will go up, but the upward process will be difficult, but we are sure of its final direction.
3. About SEC Chairman Gary Gensler
DLN : SEC Chairman Gary Gensler seems to be a big demon in this industry. Do you think so too?
Arthur Hayes : People are confused about the problem, not the problem. You can listen to his lectures, he's a very smart man. When he sits in government office, he becomes a complete fool. That's politics. What if someone replaces him? Gary Gensler is not the problem. The SEC is not the problem. If the set of regulations that you were unhappy with from the beginning are still in place, if your elected representatives choose to focus on other things instead of considering creating a framework for cryptocurrency, then removing Gary Gensler will not make any difference. All eyes are on Gary Gensler, but in fact, it can be said that he is irrelevant.
4. About Bitcoin Reserve Plan
Arthur Hayes : I think it's almost impossible to accomplish, even if Trump is elected. You need a critical mass of people to vote for it, you know, that would somehow negatively impact the Treasury or the Fed or the attention that is needed to maintain the Treasury market.
DLN : Do you think this is a good idea, even if it won’t come to fruition?
Arthur Hayes : Sure, that's a good idea. The US should weaken the dollar and eventually buy Bitcoin and gold. That would solve a lot of the US' problems. They would weaken the dollar and Bitcoin and gold would go up. Would the US government actively try to buy Bitcoin? I highly doubt it. They would buy gold first and then Bitcoin. But the transaction is the same. We all have the same motivation to do it.
5. BlackRock in the crypto industry
Arthur Hayes : The whole point of crypto is that there are no barriers to entry. BlackRock should be able to use Bitcoin, and a Filipino who doesn't have access to financial services should be able to use crypto. Are the incentive structures strong enough? What is the theory behind how blockchain works? How do you ensure decentralization? Are there any consequences to decentralization?
I've written about this a little bit, like: like... passive disease, is it going to infect crypto, are they going to grab all the Bitcoins and then ossify the network? In theory, yes, it could happen. But it's still an open playing field. If you own a BlackRock product, you own a derivative of a cryptocurrency, you don't own the cryptocurrency - BlackRock actually owns your cryptocurrency. So BlackRock's product is a tempting product for people, but it's not cryptocurrency.
6. About the price of Bitcoin
Arthur Hayes : Bitcoin is going to go high in this cycle, very, very high. Maybe a few hundred thousand dollars, maybe a million dollars. There is too much debt to roll over. We are entering a period of change in the global monetary architecture. We don't know what the future will look like, but the institutions (and people) that have done so much for the past 80 years will be very resistant to change.
