Compiled by: Wu Blockchain
In a recent interview on the Alpha First podcast, Arthur Hayes shared his bold predictions about the future of the cryptocurrency market. He believes that with the potential rise of the Trump administration, the US's loose monetary policy will lead to a depreciation of the US dollar, which in turn will drive up the prices of Bitcoin and other crypto assets. He also discussed global inflation, the monetary policies of sovereign states, and how to enable Bitcoin and MEME coins (Memecoin) and other crypto assets to benefit. He emphasized that investors need to be vigilant in a bull market and avoid overlooking market risks due to greed. In addition, he looked ahead to future market trends and predicted that Bitcoin could reach the milestone of $250,000 by 2025.
Note: The views expressed by the guests do not represent the views of Wu Blockchain. Wu Blockchain does not endorse any products or tokens, and readers are advised to strictly comply with the laws and regulations of their respective jurisdictions.
Listen to the full podcast (YouTube):
https://www.youtube.com/watch?v=xONEXGRcBMU
Trump's Economic Policies Will Lead to Dollar Depreciation and Benefit Bitcoin
Dreamer: The election has just ended a few weeks ago, and there have been many changes in market prices. What can we expect in the next 12 months? Do you have any visions to share with us? What is worth noting in the overall landscape of cryptocurrency forecasting?
Arthur: From my perspective, the market's predictions are correct. They expect Trump and his new cabinet members to print a lot of money in the US. One of their campaign platforms was to attract manufacturing and industrial companies back to the US through a weak dollar policy. Then, they will inject a lot of credit through bank lending to increase the amount of credit in the US economy, to drive production and raise wage levels. All of this will lead to inflation.
The ultimate losers will be those who hold savings in dollars or hold government bonds. While those with fixed-supply assets, like Bitcoin, will perform very well. We're already seeing this trend, right?
So, I've plotted some data comparing the total US bank credit and Bitcoin's performance. Currently, Bitcoin is clearly outperforming. This indicates that if Trump takes office, his plan is already quite clear - to weaken the dollar, use credit to stimulate the market, get people back to work, and restore US production capacity. I think he will execute on this plan.
Will Bitcoin Reach $1 Million?
Scott: I have a follow-up question about Trump. You've made a bold prediction that if Trump takes office, Bitcoin could reach $1 million. Do you still believe that everything will develop as expected? Do you still have confidence?
Arthur: I'm very confident, but I'm not sure if it will happen in the short term. In fact, this trend started when Trump was elected president in 2016. At that time, he pushed for a trade war against China, and the Biden administration that took over later continued this policy. So now, this confrontation has become deeply rooted in American political culture.
In the past, the US has shifted most of its manufacturing and production capacity to China and Asia, where they gained a competitive advantage by weakening their currencies. As a result, American workers were impacted. Therefore, the US must bring these industries back home. To achieve this goal, trillions of dollars in credit need to be allocated to companies so that they can become profitable in the US.
Biden has already passed the CHIPS Act, the Infrastructure Bill, and the Green New Deal, all of which require massive financial support. This trend will continue.
Global Economic Policies Will Drive Inflation and Benefit Crypto Assets
Dreamer: People in the crypto space are usually the most disruptive. There's a lot to discuss around Trump. From a domestic perspective, your views make sense and give many people optimism. But if we look at the international perspective, how will the election affect foreign policy, war, and trade? For Asia, some policies may bring a certain degree of fear. Will these policies have a negative impact on the economy or cryptocurrencies? Or should we not be too concerned?
Arthur: I think fundamentally, every country is now pursuing a "my country first" policy. The US has proposed "America First," while China, through its "Common Prosperity" program, hopes to bring prosperity back to rural China or low-income groups. Therefore, the Chinese government has suppressed the real estate bubble and is now using monetary easing policies to stimulate the economy again.
Japan is undergoing capital repatriation, which will boost its economy, but it also needs more credit to prevent bank failures. Europe, on the other hand, is in trouble because it has cut off cheap energy from Russia and is now importing expensive energy from the US. But they still need to support their businesses, so they will also adopt stimulus policies.
So every country is trying to take care of its own citizens, which means restoring local industries and increasing demand for commodities. This trend will drive global inflation and further undermine the long-term prospects of bond yields.
In this environment, cryptocurrencies will perform well. Although the policies of different countries may seem different, they are actually pursuing the same goal - prioritizing the needs of their own citizens. This requires an increase in domestic credit allocation and an expansion of supply to support production and create job opportunities for people. This global trend is a huge boon for Bitcoin and other crypto assets.
Will the Bitcoin Rally Lift Other Crypto Assets?
Dreamer: It looks like this is a great opportunity for cryptocurrencies, especially Bitcoin. But what about other cryptocurrencies? How do you see them being affected by the Bitcoin rally? Are you a Bitcoin maximalist, believing that only Bitcoin has a future, and the others won't follow? Or do you think projects like Ethereum have a chance? For example, Non-Fungible Tokens, MEME coins, and DeFi - these trends have had their ups and downs. Will they also benefit from the market rally? Or are you mainly focused on institutional investors, believing that only Bitcoin will attract capital?
Arthur: I'm actually not too focused on institutional investors, because people are always saying they'll come in, but regardless, they have their own complex investment logic and credit considerations, and there are reasons why they buy or don't buy. From the perspective of retail investors, when the Bitcoin price goes up, the most important asset for everyone is Bitcoin. When my wealth in Bitcoin increases, I don't want to go back to fiat, because it doesn't make sense, right? I also won't just invest in Bitcoin. I want to put money into other crypto assets that have even higher growth than Bitcoin.
What else can we do? We'll focus on MEME coins, new Layer 1 blockchains, Layer 2 projects, Non-Fungible Tokens, and the gaming space, etc. Bitcoin leads the market, and then capital will gradually flow into other asset categories. Because ultimately, the goal is to earn more cryptocurrencies, not to exchange them back for fiat. I believe fiat will eventually go to zero.
Scott: Yes, I think everyone will try to make quick profits, and even become addicted to this rapid growth. After all, it's one of the fastest-growing asset classes. If they make profits from Bitcoin, many people won't convert back to fiat, but will instead move to other crypto assets that still have potential. You also mentioned that MEME coins in this cycle have surprised everyone, just like Non-Fungible Tokens in the previous cycle. I heard you hold some MEME coins, so is this part of the market interesting to you? How have MEME coins performed in this cycle, and can they easily reach a market cap of billions of dollars?
Arthur: It's indeed very interesting, and I really enjoy it. This phenomenon is interesting and entertaining, like that MEME coin Doge, which went from zero to $20 billion in just nine days. Simply because the US government executed a squirrel, it became a $20 billion MEME coin traded globally. This phenomenon shows how quickly we can react to cultural hot spots globally and make them interesting through MEME coins. Now, everyone knows about the squirrel that was "executed" by the US government or the state of New York. And so there's a MEME coin around it.
This is both interesting and reflective of reality. There may also be a subculture of dissatisfaction with the government, such as their adopted inflationary policies. This phenomenon has also made MEME coins a rapidly spreading attention market.
The rapid rise of MEME coins demonstrates the responsiveness of global culture
Dreamer: We also have some "blue-chip" MEME coins like the ones you mentioned that are related to current events. I think these MEME coins will have ups and downs, but we also have some MEME coins that have stabilized, like Dogecoin. Some say it could reach $1, do you think that's possible?
Arthur: I think it's possible. It's interesting, especially when it involves the efficiency of government departments or figures like a new "Elon", as they confirm certain things, which in itself becomes a classic meme. I wish I had bought some back then, because these memes are just so good and so interesting. Elon is an excellent meme creator, perhaps one of the best meme creators of all time. Although I have some doubts about his business model, in terms of meme art, he is undoubtedly a genius. So, Dogecoin could indeed reach $1.
However, I think when people start to realize how big the gap is between government propaganda and actual results, there will be a sense of "falling from the pedestal". People may re-examine the meaning of these memes and the messages they convey. This transformation will be very interesting.
Advice for newcomers: Maintain rationality and timely profit-taking in a bull market
Dreamer: There are now many technologies that make it easier to launch new Layer 1 blockchain projects or MEME coins. I think we will see more creativity flowing into this field, while also seeing more professionalization trends. Additionally, as you mentioned, the momentum from elections is also very strong. If we look back, the rise of DeFi and Non-Fungible Tokens, as well as other previously hyped trends, the excitement was very similar. So, what lessons or cautionary tales are worth sharing? Especially for those experiencing a bull market for the first time, what should they pay attention to during this process? How to avoid repeating the past in this "beautiful yet cruel world"?
Arthur: First of all, no one can profit from the market forever. Everyone knows that you can make money quickly in a bull market, but the key is how to keep those gains. For example, the MEME coins you hold now may no longer exist in one or two months. Its market capitalization may plummet from $200 million to $5 million, with such drastic changes. You cannot predict these things.
Some statistics show that only about 0.01% of MEME coin market values can exceed $500 million, and most traders end up losing money. Many people see huge gains on paper, but they always have the mentality of "I can make more", which ultimately leads to the loss of the wealth they already have.
So, if you've made some money that would be life-changing for you, take out a portion and cash out. The market will have opportunities to come back. Perhaps you can take a break and then re-evaluate the market. Maintaining rationality is very important.
Are there potential risks or catalysts in the market?
Scott: In this case, people can easily experience a "roller coaster" of market fluctuations. As you mentioned, some assets may disappear within one or two months. Some people have indeed made life-changing money in just a few days, like the MEME coin Peanut. But even a coin with a market capitalization of $2 billion can plummet quickly. Therefore, your point is correct, it is necessary to cash out in a timely manner, whether it's MEME coins or Bitcoin, you need to gradually exit some positions. As you said, profit-taking is the way to avoid losing money.
Dreamer: Are there any "black swan events" or potential catalysts that could disrupt the market? If we look back over the past few years, such as the FTX collapse or other unforeseen events, are there any trends or entities that we need to be vigilant about? Under the new Trump administration, has the market cleaned up these uncertainties and become simpler for development?
Arthur: I think a lot of it has been cleaned up. Many people suffered heavy losses in the FTX, Genesis, Three Arrows, and Luna events. So perhaps Bitcoin is already at $100,000 by the time you publish this interview (it might be that price when you release it). But in the long run, when traditional finance sees the rise in cryptocurrency prices, they will want to participate, such as through venture capital.
Many venture capital firms have raised a lot of capital, similar to the previous cycle, and they need to find large companies or important projects to invest in. In the early stages of the market, this capital is usually reasonably allocated and has good uses. But as the bull market deepens, the capital may flow into certain "hot areas" because investors have to invest to get returns. In this case, we may see some business models built on the assumption of constantly rising prices, leading to the accumulation of risks and ultimately an imbalance in the market.
I don't know exactly which sector will experience this yet, but we haven't reached the "overheating" stage. Especially when traditional financial capital enters, overcapitalization may occur in certain areas, and this is where investors need to be vigilant, to avoid a "reshuffle" when market prices become disconnected from the actual situation.
Dreamer: Yes, as you were talking, I thought about how when people have had a lot of successful trades, they can get bored and crave that feeling of quick profits again. Currently, there are many Bitcoin Layer 2 protocols announcing yield programs, but where do these yields come from? We don't want to repeat the past mistakes of promising high returns without real substance. Others may seek more trends to pursue big returns, and the risks will gradually increase. So, for those who have experienced the previous bull market, I hope they can learn from the lessons, and for newcomers, I also hope they can learn from others' experiences.
Casual talk about skiing
This interview has been very insightful. We really appreciate your time. Tonight there is an IFC event - a credit competition, I don't know if you and the others have time to participate. This is a global event, and we really hope to have the opportunity to invite you to participate in the future. I believe you will enjoy these activities and the influential figures in the crypto field. Now I'll pass the microphone to Scott to conclude this interview.
Scott: Yes, we really appreciate your time and sitting down with us to answer these questions. It would be great to see you at the IFC event. One last lighthearted question: When you're not doing crypto-related things, what do you do? What are your hobbies? How do you relax or get away from this work? Are you a foodie, for example, and seek out new restaurants? Or are there other ways you keep yourself motivated?
Arthur: I really enjoy skiing. So I spend three to four months a year on the mountains, immersed in the snow. During the ski season, I ski for eight hours a day. Besides exercising my body and enjoying outdoor activities, I hardly do anything else. This makes me feel very happy.
Scott: What's your favorite skiing destination?
Arthur: Niseko in Japan. Their powder snow is amazing, dry and light. It snows there from January to February, it's simply stunning.
Scott: So you're preparing now? Adjusting your condition?
Arthur: Yes, I'm preparing for skiing. However, the only downside of the ski resorts in Japan is that the slopes are not steep enough, there are no really dramatic steep runs.
Dreamer: The ski resorts in Salt Lake City have a lake effect. I live in Singapore, but I used to live in the US and go skiing often, though I'm a snowboarder.
Scott: Me too! Although I still ski, I prefer snowboarding. Some places are really suited for snowboarding.
Dreamer: Yes, there are some places that are very suitable. You also won't encounter snowboarders "trampling" your tracks on the slopes.
Scott: This is great! I haven't skied in a few years, but it's a hobby I've always wanted to pick up again. I'm from the northeastern United States, grew up in New Jersey and New York, and could easily go skiing in Vermont. But for the past ten years, I've been living in Houston, so it's not as convenient to go skiing anymore, no longer just a few hours' drive with all my gear.
Scott: I hope you have a great time in the coming days. I've really wanted to experience skiing in Japan, as I didn't realize they had such great skiing conditions there. I'll definitely have to try it out sometime.
Bitcoin Price Predictions for Year-End and 2025
Scott: By the way, I have a specific question. What do you think the price of Bitcoin will be by the end of this year and this time next year?
Arthur: I believe Bitcoin will reach $100,000 by the end of this year, and by the end of 2025, it may reach $250,000.
Scott: There you have it, this is the first public prediction from Alpha First: Bitcoin's price will reach $100,000 by the end of the year, and may reach $250,000 a year from now. Maybe we'll have a chance to verify this prediction at DevCon and other events next year. I hope it's not just $250,000, but even higher.
