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ToggleSome people liquidated their positions at the top, while others buy the dips and added to their positions. Arthur Hayes chose to do nothing. In his latest article , the BitMEX co-founder and CIO of Maelstrom Fund frankly stated that he executed almost no trades throughout the first quarter—not because he was lazy, but because two unexploded bombs made it impossible for him to price in risk. One was AI deflation, and the other was the Strait of Hormuz. Before these two variables converged, every direction in the market could be a trap.
The only exception is Hyperliquid ($HYPE). Hayes stated that he continues to increase his bets and has no intention of stopping.
Bomb #1: AI is dismantling the very foundation of the US consumer engine.
Hayes's deflationary argument doesn't start with the CPI, but with a Silicon Valley boss's personal confession.
In the article, he mentioned that the founder of a crypto gaming company approached him, saying he was running an AI agent team using Anthropic's Claude model. The results astonished him: a development roadmap that would normally take six months was completed in just four days by one person leading the AI. The boss's next decision was straightforward—lay off 50% of the staff.
Behind this anecdote, Hayes sees the outline of systemic risk. About 70% of US GDP is comprised of consumer spending, and consumers' purchasing power is highly dependent on bank credit. Once knowledge workers face mass unemployment, credit defaults will trigger a chain reaction, putting the banking system under pressure to go bankrupt and ultimately forcing the Federal Reserve to print more money.
On the numbers, his observations are even more chilling: the median annual unemployment benefit in the United States is about $28,000, but the median salary for knowledge workers falls between $85,000 and $90,000. This gap of over $60,000 will not be filled by any safety net.
Hayes concludes that AI-induced deflation is not a future phenomenon, but rather an accelerating reality in the present. The only question is when the Federal Reserve will be forced to intervene.
Bomb Two: The Strait of Hormuz, three scripts, three completely different endings.
Another bombshell: Hayes presented three scenarios, each with drastically different impacts on asset prices.
Scenario 1: Returning to normal.
With the war over and the strait reopened, everything returned to the pre-war state of affairs. Hayes believes that the deflationary forces of AI remain, and Bitcoin might rebound to $80,000 to $90,000, but without a clear signal from the Federal Reserve that it is shifting towards printing money, a truly significant market rally is unlikely.
Scenario 2: Tehran toll station.
This is the scenario Hayes depicts most deeply, and also the most subversive script in his eyes. Iran controls the Strait of Hormuz and begins charging passing ships a $2 million toll in RMB.
The destructive power of this arrangement lies not in the military sphere, but in the financial structure. If countries want to pay the toll, they must sell their dollar assets—US Treasury bonds and US stocks—and then buy gold, converting it into RMB through the Shanghai or Hong Kong gold markets before finally paying the toll.
This is tantamount to the end of the petrodollar system. Hayes cited several sets of data to support this argument:
Since the start of the war, foreign holdings of securities in the Federal Reserve have decreased by a net $63 billion; non-monetary gold has been the largest U.S. export for four to five consecutive months, with an annual growth rate of 342%; at the same time, transaction volume in China's cross-border payment system CIPS has also increased significantly.
Hayes points out that this data is not isolated statistical noise, but an early sign that the global reserve system is quietly being restructured.
He also added a "Scenario 2.5" sandwiched between the formal scenarios: On April 12, Trump announced that the U.S. Navy would close the Strait of Hormuz. Hayes is paying close attention to this, believing that if this variable comes true, it will completely change the probability distribution of all subsequent scenarios.
Scenario 3: The Empire's Counterattack.
The US military's intervention to destroy Iran's interception capabilities completely eliminates the threat to the Strait. However, Hayes emphasizes that this scenario carries an extreme tail risk: before its defeat, Iran might choose to destroy the entire Persian Gulf's energy infrastructure as a last-ditch effort. If this scenario materializes, global energy supplies would evaporate instantly, leaving central banks with no choice but to simultaneously start printing money on an unprecedented scale.
Framework Shift: Currency Quantity vs. Currency Price – Which Side is Bitcoin On?
Hayes devoted considerable space in the article to explaining why he believes Bitcoin is a better investment than tech stocks in this environment.
The core argument is just one sentence: "Bitcoin has no cash flow, so the discount rate is invalid for it."
Under the traditional DCF valuation framework, rising interest rates compress the present value of future cash flows, thus putting pressure on the valuations of tech stocks. However, Bitcoin's fiat currency value, assuming a fixed supply, essentially depends on only one thing: the total amount of fiat currency circulating in the market. The more currency there is, the higher Bitcoin's fiat currency price will be, regardless of interest rate levels.
He further pointed out that future central banks may simultaneously perform two seemingly contradictory tasks: raising interest rates (to suppress inflation) and printing money (to finance government military spending and commodity reserves). This environment would be a double blow to DCF assets (tech stocks), but a strong tailwind for fixed-supply assets (Bitcoin, gold).
As for how to determine if the signal for money printing has arrived, Hayes provides a simple indicator: the MOVE Index. He believes that once this index, which measures the volatility of the US Treasury market, breaks through 130, it is a precursor to the Federal Reserve being forced to take action and also an opportune time for a significant increase in monetary policy.
Current hand: Hold 60K before raising, HYPE is the only exception.
During the waiting period before the two bombs landed, Hayes' operational logic was very clear.
Regarding Bitcoin, he considers $60,000 a key support level. If the price retests this level and holds, he will consider adding to his position. He doesn't plan to go all-in before the Federal Reserve explicitly expands its balance sheet.
Gold is another asset he continues to increase his holdings in, based on the same logic as Bitcoin—fixed supply, no reliance on DCF, and benefit from the expansion of the money supply.
Within the crypto market, Hyperliquid is Hayes' most aggressive bet. Maelstrom has accumulated over 247,344 HYPE tokens, with a market capitalization of approximately $10.44 million. Hayes has publicly given a price target of $150 (by August 2026), citing Hyperliquid's current annualized revenue of approximately $1 billion and the upcoming HIP-4 upgrade, which he predicts will steal a significant share of the prediction market from Polymarket and Kalshi.
"I'm waiting for two bombs to give me an answer," Hayes wrote, his tone less confident than usual and more cautious. "Until then, the deal is meaningless."
From one perspective, this may be Hayes' most conservative article in recent years. But behind this conservatism lies his deep respect for two forces that are poised to reshape the global financial order—one from algorithms and the other from the Taiwan Strait.
He chose to wait. Because on a battlefield where visibility is near zero, sometimes the best deal is not to make a deal.
