Dialogue with Arthur Hayes: BTC will reach $100,000, BTC should not fall into the state of Ethereum.

Chainfeeds Introduction:

In this podcast, Nic Puckrin once again invited Arthur Hayes, a senior expert in the field of cryptocurrency, to discuss the current market dynamics and future investment opportunities. As the co-founder and former CEO of BitMEX, Arthur has profound and unique insights into the crypto market. In the show, he analyzed the impact of the fluctuations of the yen on the market and the role of the US Treasury in the political environment.

Source:

https://www.techflowpost.com/article/detail_19625.html

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TechFlow

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TechFlow: Arthur explained the impact of the U.S. Treasury's quarterly refinancing announcement on market liquidity. He pointed out that due to tax revenue, the Treasury reduced the issuance of short-term Treasury bonds in the second quarter, resulting in a decline in market liquidity, which in turn affected the performance of cryptocurrencies. He believes that as the Treasury reissues Treasury bonds in the second half of the year, market liquidity will gradually improve. At the same time, Arthur analyzed the operating mechanism of the yen carry trade in detail, pointing out that the Bank of Japan (BOJ) supports this huge carry trade by creating yen. The scale of this trade has reached 25 trillion US dollars, making it one of the most important trades in the world. With the depreciation of the yen and the emergence of inflation, the Japanese people began to become more dissatisfied with the government, and the BOJ was forced to take measures to gradually normalize monetary policy. In addition, Arthur believes that the unwinding of the yen carry trade is a structural process that is expected to continue. He is cautious about the future policies of the BOJ and believes that they will not easily return to the state of negative interest rates. He also mentioned that U.S. Treasury Secretary Yellen and Federal Reserve Chairman Powell may help the BOJ to make a smooth transition and mitigate the impact of the market by printing money. Arthur confirmed that there are indeed some funds and cryptocurrency investors who invest in cryptocurrencies by borrowing yen, which is a common practice. He noted that many traditional hedge funds seek the lowest cost of capital, and if risk management allows, they would borrow yen and use the funds to buy crypto assets such as Bitcoin. He also mentioned that with the inflow of yen borrowing, the liquidity of funds in the cryptocurrency ecosystem has increased. He also pointed out that the price of Bitcoin in yen has risen a few days ago, which shows that this trading strategy is effective. If the Bank of Japan continues to maintain zero interest rates, then borrowing yen and investing in Bitcoin will be a very attractive trade. He further explained that when there is a large-scale de-risking in the entire financial ecosystem, investors tend to sell more liquid assets such as cryptocurrencies instead of those with less liquidity (such as commercial real estate). He emphasized that the liquidity of cryptocurrencies makes it the preferred asset for investors in times of market turmoil. Arthur mentioned his recently launched Airheads project and is very optimistic about Ordinals. He believes that as the Bitcoin market recovers, Bitcoin holders will become richer and will seek some digital assets that can embody cultural values. He emphasized that ordinals, as digital artifacts native to Bitcoin, are fundamentally different from traditional NFTs, which makes it uniquely attractive in the market. Arthur pointed out that the current low market sentiment is an excellent time to build a unique art collection. He encouraged investors to find original artworks that resonate with them and use this opportunity to demonstrate the potential of ordinal technology. In addition, Arthur mentioned his role as an advisor to Aptos and expressed optimism about the project's collaboration with traditional financial institutions. He believes that Aptos' application in the Web 3 field will drive its growth and predicts that in the next two to three years, Aptos will achieve important changes in its market position.

Trustless Labs: Arch Network is mainly composed of Arch zkVM and Arch verification node network. It uses zero-knowledge proofs (zk-proofs) and decentralized verification networks to ensure the security and privacy of smart contracts. It is easier to use than RGB and does not require another UTXO chain to bind like RGB++. Arch zkVM uses RISC Zero ZKVM to execute smart contracts and generate zero-knowledge proofs, which are verified by a decentralized verification node network. The system runs on the UTXO model and encapsulates the state of smart contracts in State UTXOs to improve security and efficiency. Arch also uses Bitcoin's UTXO model, where states and assets are encapsulated in UTXOs, and state transitions are performed through the concept of single use. The state data of smart contracts is recorded as state UTXOs, and the original data assets are recorded as Asset UTXOs. Arch ensures that each UTXO can only be spent once, thereby providing secure state management. RGB is an early smart contract expansion idea of ​​the BTC community. It records state data through UTXO encapsulation, providing an important idea for the subsequent native expansion of BTC. RGB adopts an off-chain verification method to move the verification of token transfer from the consensus layer of Bitcoin to the off-chain, and is verified by clients related to specific transactions. This method reduces the need for full network broadcasting and enhances privacy and efficiency. However, this privacy enhancement method is also a double-edged sword. Although privacy protection is enhanced by only allowing nodes related to specific transactions to participate in the verification work, it also makes third parties invisible, making the actual operation process complicated and difficult to develop, and the user experience is poor. In addition, RGB introduces the concept of a single-use seal. Each UTXO can only be spent once, which is equivalent to locking it when creating the UTXO and unlocking it when spending it. The state of the smart contract is encapsulated by UTXO and managed by the seal, thus providing an effective state management mechanism. RGB++ is another expansion route of Nervos under the idea of ​​RGB, which is still based on UTXO binding. RGB++ uses Turing-complete UTXO chains (such as CKB or other chains) to process off-chain data and smart contracts, further improving the programmability of Bitcoin and ensuring security by isomorphically binding to BTC. RGB++ uses Turing-complete UTXO chains. By using a Turing-complete UTXO chain like CKB as a shadow chain, RGB++ is able to process off-chain data and smart contracts. This chain can not only execute complex smart contracts, but can also be bound to Bitcoin's UTXO, thereby increasing the programmability and flexibility of the system. In addition, the isomorphic binding of Bitcoin's UTXO and the shadow chain's UTXO ensures the consistency of status and assets between the two chains, thereby ensuring the security of transactions.