BitMEX founder Arthur Hayes today published a new article titled "Black or White", focusing on the future economic policies of the United States and predicting that after Donald Trump is re-elected as President of the United States, he will push for industry policies similar to China's, which will further drive the rise of BTC (BTC) in an inflationary environment.
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ToggleFrom 'QE for the Rich' to 'QE for the Poor'
In the article, Arthur Hayes points out that since the establishment of the Federal Reserve in 1913, the United States has gradually shifted from pure capitalism to "socialized capitalism", especially in times of economic distress, where the phenomenon of "socializing the gains of the rich and socializing the losses of the poor" often occurs. The quantitative easing (QE) from 2008 to 2020 mainly benefited the rich, who invested the funds they received in assets, but did not drive actual economic growth, leading to a gradual increase in the debt-to-GDP ratio.
However, during the 2020 pandemic, the Trump administration adopted a different strategy, directly distributing "stimulus checks" to the public, which boosted consumer purchasing power and drove actual economic activity, causing the debt-to-GDP ratio to actually decrease. Arthur Hayes described this policy as "QE for the Poor". His article states:
"With the velocity of money far exceeding 1, the economy is booming. That is to say, $1 of debt is creating more than $1 of economic activity. Thus, the US debt-to-nominal GDP ratio has miraculously declined."
American Capitalism with Chinese Characteristics
Arthur Hayes believes that Trump's new economic policies will continue to drive this "QE for the Poor" and emphasize an "America First" industrial policy, similar to China's economic development model that began in the 1980s. Specifically, the Trump administration plans to provide tax incentives and subsidies to drive the return of key industries such as shipbuilding, semiconductors, and automotive manufacturing to the United States, and create domestic employment opportunities.
These policies are expected to strengthen the competitiveness of US manufacturing and support economic growth through bank credit expansion. Arthur Hayes also pointed out that the Trump administration may relax financial regulations, particularly the Supplementary Leverage Ratio (SLR) restrictions, allowing banks to purchase unlimited amounts of US Treasuries and other "approved" corporate debt to achieve "QE for the Poor" and promote actual economic activity.
In Arthur Hayes' forecast, the new economic policies will benefit ordinary workers, small and medium-sized enterprises, and companies producing "approved products", while the rich holding long-term bonds or deposits may suffer losses due to returns lower than the economic growth rate. The revival of unions indicates that workers will receive higher wages due to inflation. Arthur Hayes believes that this economic model will drive economic growth and reduce the US debt-to-GDP ratio.
The New Inflation-Resistant Assets
However, as the US government increases support for domestic industries, market trust in fiat currency may further decline. The Trump administration's "America First" policy aims to promote the development of domestic manufacturing and provide extensive credit support. While this policy can drive economic growth, it may also accelerate inflationary pressure on the US dollar.
Arthur Hayes stated that in order to reduce the ratio of US debt to nominal GDP (deleveraging), the US needs to further expand the scale of credit. This credit expansion will stimulate market demand, particularly for scarce assets like BTC, driving their prices higher. In this context, BTC, with its scarcity and anti-inflationary properties, may become a sought-after hedge asset for investors.
Arthur Hayes believes that the value of BTC may rise significantly in the next few years, even reaching $1 million. BTC, like gold, is an asset class that can resist the devaluation of fiat currency, and its price will continue to rise as the US accelerates quantitative easing.
