author | DLNEWS
Compile | Wu Blockchain about blockchain
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Arthur Hayes ' first job was on the trading floor of Deutsche Bank in Hong Kong. The day he started in September 2008, Lehman Brothers filed for bankruptcy. He was 22 years old.
The days of high-octane trading and million-dollar bonuses came to an abrupt end.
Adventurous young traders like Hayes are being shunned by regulation, compliance departments and a rigid office culture.
Then he discovered cryptocurrency.
“When I read the Bitcoin white paper, it really resonated with real ideas of mine — like how bad the corrupt banking system is,” he told DL News.
Fast forward a decade — a process that included co-founding the BitMEX cryptocurrency exchange and becoming a billionaire, as well as a guilty plea and time on probation in the United States — and today’s crypto industry is starting to look more and more like the banking industry he left.
Financial giants including BlackRock and Franklin Templeton now offer retail investors cheap and secure ways to invest in cryptocurrencies.
Fidelity wants to include Bitcoin in US pension funds.
It’s still the same old business, Hayes said.
"It still has the energy of a very diverse group of people around the world, coming from finance or technology backgrounds. They want something different," Hayes said last week from his office in Singapore.
“They want something that has unlimited upside potential, that’s obviously very volatile and can get wiped out very quickly if you’re not careful. But at least has the potential to generate extreme product usage or extreme wealth.”
Hayes has the credibility of a crypto OG.
He has also become one of the most prolific and well-read market commentators on cryptocurrency and beyond.
Hayes chatted with DL News before Monday’s market crash and talked about the election, the financial industry’s acceptance of cryptocurrencies, and his thoughts on the price of Bitcoin.
About the election
AH: They think Trump said the right thing, so he will achieve it faster. Whether it's Trump or Hamas, it doesn't matter.
DLN: Why?
AH: Yes, cryptocurrencies donated a lot of money. But I don't think you donated enough to surpass JPMorgan, Morgan Stanley, Citibank, Goldman Sachs.
And if you think about the makeup of the people in these institutions, it’s people who come from these banks.
So while it would be nice for Trump to be elected and do these things, I think he would probably run into the same problems that he had in his first term.
You can say all these nice things and try all these policies, but if the entire fabric of government is against them, nothing will happen.
On Bitcoin and Monetary Policy
AH: Both the Trump administration and the Harris administration will print money. They will do it in different ways. But money will be printed.
So your cryptocurrency will go up – the path may be very tortuous, but at the end of the day, we know where it’s going.
About SEC Chairman Gary Gensler
DLN: SEC Chairman Gary Gensler seems to be the industry's arch-villain. Do you agree with that?
AH: People confuse the symptom with the problem. You can listen to his speeches, he's a very smart guy. But when he was in government, he was a complete asshole.
It's just politics. You can replace him with somebody else. Gary Gensler is not the problem. The SEC is not the problem.
Firing Gary Gensler won’t accomplish anything if the set of regulations you don’t like still exists because your elected representatives chose to consider other things instead of creating a framework for cryptocurrencies.
People are mad about Gary Gensler, but he actually doesn't matter.
Plans for Bitcoin Reserves
AH: I think it would be almost impossible to achieve this even if Trump were elected.
You're going to need a critical mass of people to vote for this, you know, that would somehow have a negative impact on the U.S. Treasury or the Federal Reserve or have an impact on maintaining visibility in the U.S. Treasury market.
DLN: Do you think it’s a good idea even if it’s not possible?
AH: Oh, that's a great idea. The US should weaken the dollar at the end and buy Bitcoin and gold. This will solve many of their problems.
They will weaken the dollar and Bitcoin and gold will rise.
Do I think the US government will proactively try to acquire Bitcoin? Highly doubtful. They will buy gold before buying Bitcoin.
But it's the same deal. It's the same motivation for us to do this.
On BlackRock’s Entry into Crypto
AH: The whole point of cryptocurrency is that there is no barrier to entry.
BlackRock can use Bitcoin, and people without financial services in the Philippines should also be able to use cryptocurrencies.
Are the incentive structures strong enough, and the game theory of how blockchains work and all that stuff, to ensure that centralization doesn’t happen — and if it does, what are the consequences?
I wrote a little bit about “Will the passive disease infect cryptocurrencies and they’ll take over all the Bitcoins and then zombify the network” and so on, right?
In theory, yes, it could happen. But it's still an open field for competition.
If you own a BlackRock product, you own a derivative of a cryptocurrency, you don’t actually own the cryptocurrency – BlackRock owns your cryptocurrency.
So BlackRock's product is attractive to people because it's convenient, but it's also not a cryptocurrency.
About Bitcoin Price
AH: In this cycle, the price of Bitcoin is going to be very, very high. Hundreds of thousands of dollars, maybe $1 million.
There is too much debt to be rolled over. We are entering a period of complete change in the global monetary architecture.
We don't know what it will look like, but the people who have been the most successful over the past 80 years will be very resistant to change.
