The legendary trader and co-founder of BitMEX, Arthur Hayes, often attracts attention from the community for his unique perspectives on cryptocurrencies and the overall economy. Against the backdrop of the U.S. presidential election countdown, he recently stated in an interview with the Unchained Podcast that he believes Solana is a potential outperformer compared to Bitcoin.
Arthur Hayes: More Optimistic About Solana Than Ethereum
Hayes said he prefers Solana over ETH, and pointed out that Ethereum is currently too slow and needs a narrative shift to change people's perception of its poor performance in recent months. In contrast, he believes Solana currently has more forward-thinking, moves quickly, and may outperform Bitcoin when the market is bullish.
With just a few days left until the presidential election, Solana is a good choice because it has high liquidity, and if Bitcoin performs well, it may rise.
Additionally, Hayes also explained that in the long run, who wins the U.S. election is not important, as the Federal Reserve's decision on whether to cut interest rates on November 7 (around 2 a.m. Taiwan time on November 8) will have the greatest impact on crypto assets.
The bigger picture still focuses on the Federal Reserve's monetary policy, rather than the direct outcome of the election.
Risks of Unwinding the Yen Carry Trade
In addition to the Federal Reserve's interest rates, Arthur Hayes has also repeatedly warned of the risks of the yen carry trade.
The yen carry trade may be one of the most commonly used trading strategies in the past 30 years. As individual investors, companies, or central banks, we borrow yen with almost no interest cost, and sometimes even without paying any fees. Then, I invest these borrowed funds in assets with higher returns.
These assets may include U.S. stocks, the Nasdaq, the S&P 500 index, and even real estate and U.S. Treasuries. This trading method is estimated to involve positions of up to $20 trillion globally, all of which are invested by borrowing yen.
If the interest rate rises rapidly, your profits will be quickly wiped out. Therefore, your risk manager will remind you to "cover the risk". This means you will sell assets, sell stocks (with high liquidity), and sell Treasuries (with high liquidity). Japan is the world's largest creditor nation, so U.S. Treasury Secretary Powell and Yellen need to pay attention to this.
The key point he warns the market to pay attention to is: Focus on the exchange rate between the U.S. dollar and the Japanese yen, as this is the only important thing.
