In a recent interview on the Alpha First Podcast, Arthur Hayes shared his bold predictions for the future of the cryptocurrency market. He believes that with the potential return of the Trump administration, the US's loose monetary policy will lead to a devaluation of the US dollar, which will in turn drive up the prices of Bitcoin and other crypto assets.
He also discussed global inflation, sovereign monetary policies, and how they can benefit Bitcoin and other cryptocurrencies like Memecoins. He emphasized that investors need to be cautious during bull markets, avoiding greed that could cause them to overlook market risks. Additionally, he shared his outlook on future market trends, predicting that Bitcoin could reach a milestone of $250,000 by 2025.
Listen to the full Podcast (YouTube): https://www.youtube.com/watch?v=xONEXGRcBMU
Trump's Economic Policies Will Lead to a Devaluation of the US Dollar and Benefit Bitcoin
Dreamer: A few weeks after the election, the market prices have seen a lot of changes. What can we expect in the next 12 months? Do you have any visions to share with us? What are the notable points in the overall cryptocurrency forecast?
Arthur: From my perspective, the market's predictions are correct. They expect that Trump and his new cabinet members will 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 large amount of credit through the banking system, increasing the credit volume 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 US dollars or government bonds. While those who own assets with a fixed supply, like Bitcoin, will perform very well. We're already seeing this trend, aren't we?
So I've compiled 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 US dollar, use credit to stimulate the market, get people back to work, and restore the US's production capacity. I think he will implement 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 this will play out as expected? Do you still have confidence in this?
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 Democratic Party and the Biden administration have continued this confrontational policy. So now, this conflict has become deeply rooted in American political culture.
The United States has shifted most of its manufacturing and production capacity to China and Asia in the past, and these countries have gained a competitive advantage by weakening their currencies, which has impacted American workers. Therefore, the United States must bring these industries back home. To achieve this goal, trillions of dollars in credit need to be allocated to companies to enable them to be profitable within the United States. Biden has already passed the CHIPS Act, the Infrastructure Bill, and the Green New Deal, all of which require substantial financial support. This trend will continue.Global economic policies will drive up inflation and benefit crypto assets
People in the crypto field are often the most disruptive group. There are many things worth discussing around Trump. From a domestic perspective, your views make sense and give many people a sense of 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 do we not need to worry too much? I think fundamentally, every country is now pursuing a "domestic first" policy. The United States has proposed "America First," while China hopes to bring prosperity back to rural China or low-income groups through the "Common Prosperity" program. Therefore, the Chinese government has suppressed the real estate bubble and is now re-stimulating the economy through monetary easing. 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, has been plunged into difficulties due to the loss of cheap energy from Russia and the need to import expensive energy from the United States. However, they still need to support the operation of enterprises, so they will also adopt stimulus policies. So every country is striving to take care of its own citizens, which means restoring local industries and increasing demand for goods. This trend will drive up inflation globally and further undermine the long-term prospects of bond yields. In this environment, cryptocurrencies will perform well. Although the policies of each country seem different, they are actually pursuing the same goal, which is to prioritize 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 rise of Bitcoin drive other crypto assets?
It seems this is an excellent opportunity for cryptocurrencies, especially Bitcoin. But what about other cryptocurrencies? How do you see them being affected by the rise of Bitcoin? Are you a Bitcoin maximalist who believes 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 have had ups and downs. Will they also benefit from the market rally? Or are you mainly focused on institutional investors, believing only Bitcoin will attract capital? I'm not really focused on institutional investors because people are always saying they will 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 increases on Bitcoin, I don't want to go back to fiat, because it doesn't make sense, right? I won't just invest in Bitcoin either. I want to put money into other crypto assets that have even bigger gains than Bitcoin. What else can we do? We will focus on meme coins, new Layer 1 blockchains, Layer 2 projects, Non-Fungible Tokens, and the gaming sector, etc. Bitcoin leads the market, and then capital will gradually flow into other asset categories. Because at the end of the day, the goal is to earn more cryptocurrencies, not to exchange them back for fiat. I believe fiat will eventually go to zero.The rapid rise of meme coins demonstrates the responsiveness of global culture
Yes, I think everyone will try to profit quickly, and even become addicted to this rapid growth. After all, this is one of the fastest-growing asset classes. If you make a profit from Bitcoin, many people won't convert back to fiat, but will turn 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, is this part of the market interesting to you? How have meme coins performed in this cycle, can they easily reach a market cap of billions of dollars? This is indeed very interesting, and I really enjoy it. This phenomenon is interesting and full of fun, like that meme coin squirrel, which went from zero to $2 billion in about nine days. Just because the US government executed a squirrel, it became a $2 billion meme coin traded globally. This phenomenon shows how quickly we can react to hot topics 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 is a meme coin centered around it. It's both interesting and reflective of reality. There may also be a subculture that is dissatisfied with certain government policies, such as their inflationary policies. This phenomenon also makes meme coins a rapidly spreading attention market. I think it's possible for Dogecoin to reach $1. This is very interesting, especially when it involves the efficiency of government departments or a new "Elon" type of character, who confirms certain things, which in itself becomes a classic meme. I wish I had bought some, because these memes are just so good and so much fun. 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 the art of memes, 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 achievements, there will be a sense of "falling from the pedestal." People may re-examine the meaning of these memes and the information they convey. This transformation will be very interesting.Advice for New Entrants: Maintain Rationality and Timely Profit-Taking in a Bull Market
Dreamer: There are now many technologies that make it easier for new Layer 1 blockchain projects or meme coins to be launched. I think we will see more creativity flowing into this field, as well as more professionalization trends. In addition, as you mentioned, the momentum brought by the election is also very strong. If we look back, the rise of DeFi and Non-Fungible Tokens, as well as other previously hyped trends, had a similar excitement at the time. So, what are some lessons or cautionary tales 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 mistakes 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 earnings. For example, the meme coin 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 capitalizations 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 can change your life, 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 are easily experiencing a "roller coaster" of market volatility. As you mentioned, some assets may disappear within one or two months. Some people have indeed made life-changing money in a few days, such as 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 is meme coins or Bitcoin, you need to gradually exit some positions. As you said, taking profits is a way to avoid losses.
Dreamer: Are there any "black swan events" or potential catalysts that could disrupt the market? If we look back at the past few years, such as the collapse of FTX 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 many have already been cleaned up. Many people suffered heavy losses in the events of FTX, Genesis, Three Arrows, and Luna. So perhaps Bitcoin has already risen to $100,000 (maybe by the time you release this interview, it will be that price). 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, these funds are usually reasonably allocated and have good uses. But as the bull market deepens, the funds 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 market imbalance.
I don't know exactly which sector will experience this situation, but we haven't reached the "overheating" stage yet. Especially when traditional financial capital enters, over-investment may occur in certain areas, and this is where investors need to be vigilant, to avoid "reshuffling" when market prices become disconnected from actual conditions.
Dreamer: Yes, when I listen to you, I think that when people have had a lot of successful trades, they will become bored and crave that feeling of quick profits again. Currently, there are many Bitcoin Layer 2 protocols that have announced yield programs, but where do these yields come from? We don't want to repeat the past mistakes of promising high returns without real foundations. 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 exciting. We greatly appreciate your time. Tonight there is an IFC event - a credit competition, I don't know if you and 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 this type of activity, enjoy the competition 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 that keep you 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. In addition to strengthening 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, and it's simply amazing.
Scott: So you're preparing now? Adjusting your condition?
Arthur: Yes, I'm preparing for skiing. The only downside of the ski resorts in Japan is that the slopes are not steep enough, without those really dramatic steep runs.
Dreamer: The Salt Lake City ski resorts have a lake effect. I'm based in Singapore, but I used to live in the US and went skiing often, though I'm a snowboarder.
Scott: Me too! Although I still ski, I prefer snowboarding. Some places are really well-suited for snowboarding.
Dreamer: Yes, there are some great places. You also won't have skiers "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. However, for the past ten years I've been living in Houston, so it's not as convenient to go skiing anymore - it's no longer just a matter of gearing up and driving a few hours.
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 may reach $250,000 by the end of 2025.
Scott: There you have it, this is the first public prediction from Alpha First: Bitcoin will reach $100,000 by the end of the year, and possibly $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 even higher than $250,000 by then.
