Compiled & translated by: TechFlow TechFlow
Guest: Arthur Hayes
Host: Michael Jerome
Podcast source: threadguy
Original title: Arthur Hayes: BTC Price Targets, Trading Advice, Bear Market and More | TG Podcast
Broadcast date: November 15, 2025
Summary of key viewpoints
I am very optimistic about the current market. Bitcoin is one of the best-performing assets in human history.
Now is a great time to invest for patient investors with cash on hand who can avoid using high leverage.
The current market performance is largely due to investor impatience and the excessive use of leverage in trading.
Many private firms also seek investment from venture capital funds because they enjoy the interaction with bankers and institutional fund managers, crave the adulation, and enjoy attending ceremonial meetings and events. It is this very psychology that makes them willing to invest in underperforming funds.
All investment operations are aimed at generating returns, and these returns will ultimately translate into holding more Bitcoin.
Zcash is the last project in the cryptocurrency space that has the potential to achieve a 1000x return.
Ultimately, I decided to continue adding to my Zcash position. I believe it has the potential to reach 20% of Bitcoin's value. Currently, my investment plan is nearing completion, but I might buy some more if the price pulls back.
If any politician publicly declares that they will adopt austerity policies similar to those of 1929-1930, that would be a sign that my bullish view has failed.
Gold and silver are tools used by nations to protect their currencies from devaluation, while Bitcoin and a select group of cryptocurrencies are weapons people use to combat inflation.
The best investors are able to accept two seemingly contradictory views simultaneously. I believe in the long-term potential of an asset, but in the short term, my goal is to maximize my Bitcoin holdings.
My advice to newcomers is to put aside those "high-risk, get-rich-quick" ideas for now. You can observe your emotions and understand this eagerness for quick success, but don't let it control you.
Arthur Hayes discusses the interplay between grassroots cryptocurrencies and venture capital (VC) investors.
Host: Do you think there is a disconnect between venture capital (VC) in cryptocurrencies and the on-chain liquidity market?
Arthur:
I don't think this is a disconnect, but rather an incentive problem. These investors' behavior is entirely determined by their incentive mechanisms. If they need returns through limited partners (LPs) and must collect management fees in some way, then they will naturally operate according to the crypto VC model. Under this model, most crypto venture capital funds tend to underperform Bitcoin and Ethereum, depending on the specific fund type.
In fact, the performance of traditional venture capital funds is not optimistic either. Apart from large, well-known funds like Andreessen Horowitz (a16z) and Sequoia, many VC funds have not actually made a profit, and their returns even lag behind the S&P 500, let alone the Nasdaq. Instead of paying exorbitant management fees, it's better to simply buy an ETF, which can outperform 99% of VC funds.
I recall mentioning this to a high-net-worth individual. He was an investor in a family office, and as a member of the family, his colleagues asked me why I would invest in these mediocre VC funds. They were always talking about finding the "next hottest VC fund." I expressed my understanding, but he ultimately admitted that it was more about the "atmosphere." They enjoyed interacting with bankers and institutional fund managers, loved being admired, and enjoyed attending those ceremonial meetings and events. It was this mentality that made them willing to invest in these underperforming funds. They felt that this was the meaning of being an investor: to be recognized and praised.
Therefore, in a sense, these VC funds may seem out of touch with the market, but for their target audience , they are actually fulfilling the psychological needs of these investors, rather than just pursuing financial returns.
Who is Arthur Hayes?
Host: I'd love to hear your story. Many viewers of this live stream are likely a new generation of cryptocurrency enthusiasts, such as those following Solana, Meme, or Axiom Crew in 2024. Could you briefly introduce yourself first?
Arthur:
Of course! I first encountered cryptocurrencies in 2013. Before that, I worked as a market maker for ETFs at Citibank and Deutsche Bank, based in Hong Kong. Later, I lost my job. In the spring of 2013, I stumbled upon the Bitcoin white paper, when Bitcoin was priced at around $200. This white paper deeply resonated with me because I had always been interested in gold and concerned about the Federal Reserve and the global banking system's actions in undermining the value of currencies through monetary policy. These issues were also addressed in my business school studies. The concept of cryptocurrencies was very meaningful to me, and as someone who loves financial history, I was incredibly excited because I believed that cryptocurrencies could be as significant as the invention of the printing press.
At the time, I was fortunate enough to read this white paper after losing my job, and thanks to some savings and the help of friends, I decided to abandon traditional jobs and try my hand at the cryptocurrency field. Thus, the idea of creating a Bitcoin and cryptocurrency-related business was born, and that's how BitMEX came to be.
My goal was to build a derivatives exchange that I, as a trader, would want to use. Later, in 2014, I founded BitMEX with two co-founders, Ben Delo and Samuel Reed. In 2016, we launched perpetual contracts, a game-changing financial derivative. By 2018, BitMEX had become one of the world's largest cryptocurrency exchanges.
Afterward, I was imprisoned on charges brought by the U.S. government but was later pardoned. Now, I'm back in the markets, focusing on managing my own funds. We founded Maelstrom, a company focused on early-stage token investing and advisory services. Some of our successes include Ethena and EtherFi, as well as several liquidity trading projects. You might occasionally see me promoting my investments on X. We're also launching a private equity investment vehicle to invest in emerging, small but very important crypto infrastructure projects.
How to position yourself in the market and understand the mindset of leveraged trading
Host: How are you currently positioning yourself in the market? How did you feel when you saw Bitcoin drop to $98,000?
Arthur:
At Maelstrom, we currently have approximately 98% of our funds invested in the market. While we do hold some cash on hand, market volatility doesn't significantly impact us because most of our investments are low-cost, allowing me to remain relatively calm in the face of market changes. Furthermore, our lack of leverage allows me to assess market trends more objectively.
I know many of my listeners may hold some leveraged positions, especially long in Bitcoin or other cryptocurrencies. I understand this can be stressful, as leverage requires not only accurate market direction prediction but also precise entry and exit timing. More importantly, leveraged trading involves periodic funding fees, which often lead traders to change strategies due to short-term volatility, such as, "My performance has been poor over the past 24 hours; should I adjust my strategy?"
This psychological pressure is particularly pronounced during periods of high market volatility. For example, when you're bullish on the market but find that prices have only risen by 1% or 2%, or even when the macroeconomic environment seems favorable, Bitcoin falls below the psychological threshold of $100,000. At this point, those holding leveraged positions may feel anxious, not only because of holding costs but also because of a lack of patience or ability to persevere. This is the biggest challenge of leveraged trading.
I understand why some people choose to use leverage. For many looking to quickly improve their financial situation, time and money can be very limited, so they hope to achieve rapid returns through leverage. However, if the market doesn't perform as expected, this strategy often leads to anxiety or even losses.
From a macro perspective, I believe the current economic environment is very favorable for cryptocurrencies. I'm still buying some assets, primarily Zcash. While the market as a whole hasn't entered its "alt market season" yet, those who have focused on highly liquid assets and Zcash over the past 18 months should have performed very well. Although most other cryptocurrencies have underperformed, the overall market remains in an upward trend. Therefore, I'm very optimistic about the current market.
I believe now is a very good time to invest for patient investors with cash on hand who can avoid high leverage . If we look back at November and December 2021, the market was at historical highs, investor sentiment was high, and everyone was optimistic. At that time, central bank rhetoric focused primarily on inflation. For example, the Federal Reserve clearly stated the need to slow the economy and announced plans to raise interest rates starting in March 2022. If you look at the chart of the rate hike cycle at that time, the curve was clearly upward.
However, comparing the current situation to today's, we can see that the market environment has changed significantly. Credit growth has stalled, Federal Reserve officials are beginning to discuss the problem of insufficient reserves in the system, and there is even a possibility of restarting quantitative easing (QE). If you look at charts of current central bank easing cycles or interest rate hike cycles, you'll find that most central banks are now cutting interest rates, rather than raising them.
From a political perspective, current discussions revolve more around hot topics such as artificial intelligence and immigration. Politicians around the world are promising voters various benefits, such as "free services" or "extra perks," but almost no one is mentioning a general increase in taxes. While some have proposed raising taxes on the wealthiest 1%, this is more of a voter appeasement strategy than a real fiscal solution. Politicians' real strategy is to deliver on these promises through printing money, not through tax increases. Therefore, the likelihood of a credit contraction in the next 12 to 18 months is virtually zero. This contrasts sharply with the policy environment at the market peak in 2021.
The market does appear somewhat weak right now, as we are in a transitional phase, especially with the Federal Reserve and the People's Bank of China gradually increasing their monetary easing. In the United States, the presidential election is approaching in 2026. The Republican Party (the red team) has recently performed poorly in several key elections in states like New York and Virginia. Trump, a seasoned politician, knows exactly what measures are needed to win elections. Republican "economic stimulus" may focus on artificial intelligence, data centers, weapons production, and mortgage relief, while Democrats tend to push for climate change policies, social justice projects, and free meals and public transportation. Despite their different policy priorities, both parties are essentially supporting their respective voter bases by printing money. For cryptocurrency investors, this continued expansion of the money supply is the lifeline of the market.
Whether it's "socialism," "industrialized nation," or "capitalism," these are merely different political labels designed to attract different voters. Ultimately, their core strategy is to fulfill these promises by printing money, not by increasing taxes. This " inflation tax" is actually the only politically viable way to address the massive debt accumulated over the past 40 to 50 years.
That's why I'm very optimistic about the current market. These trends are readily apparent simply by reading the news. I don't need to rely on complex indicators, magic charts, or technical analysis tools; observing the policy directions politicians are pushing is sufficient to identify future investment opportunities.
What conditions might cause Arthur's bullish view to fail?
Host: So, what are the conditions under which this bullish view fails?
Arthur:
If any politician publicly declares that they will adopt austerity measures similar to those of 1929-1930, that would be a sign that my bullish view has failed. Let me give you an example: then-US Treasury Secretary Andrew Mellon, a prominent banker, put forward an extreme economic view in the early stages of the Great Depression. His core idea was "liquidate credit, liquidate capital." He meant that those who lived lavishly through borrowing should pay the price, the system needed to be reset, and all bad debts had to be cleared up before the economy could return to a healthy state.
Of course, his original words were more concise than my paraphrase, but the core idea was: if someone borrowed heavily but failed to generate enough income to support those debts, they should go bankrupt, not be bailed out by the government. It was this policy that led to a sharp contraction in credit in the early 1930s, directly triggering the Great Depression. This history is documented in economics textbooks. As a result, this policy was extremely unpopular, leading to President Hoover's crushing defeat in the next election.
Therefore, if any politician today—whether a "communist" in China, a leader in the United States, or even a politician from another country—publicly advocates similar austerity measures, such as allowing credit to decline and ceasing bailouts for failing businesses, it would be a significant signal. However, I haven't seen any such signs yet. In fact, no major politician in any G7 country is willing to take such a position. The only exception might be Milei in Argentina, but Argentina's economy is too small to have any substantial impact on global markets.
In G7 countries, politicians are reluctant to adopt austerity policies because of the enormous social and economic risks they would entail. A massive credit crunch could lead to soaring unemployment and the loss of wealth for many rich individuals. Such an outcome is unacceptable in democratic elections, as voters would not support such a policy. Even in non-democratic countries, it would be difficult to gain support within the government itself.
Why are cryptocurrencies currently underperforming?
Host: Why are cryptocurrencies performing poorly in the current market environment?
Arthur:
If you bought Bitcoin in January 2025, the price now is likely the same as it was then, or even slightly lower. If you invested in smaller cryptocurrencies, you might have faced even greater losses. However, if you bought Bitcoin two years ago, your return on investment would be positive. If you bought Bitcoin between April 9th and 11th this year, the so-called "Liberation Day," your return would be approximately between 30% and 44%.
So, if you've recently entered the cryptocurrency market or just opened a leveraged position, I completely understand you might be experiencing losses, but we should look at Bitcoin's performance over a longer timeframe. Bitcoin is one of the best-performing assets in human history. The problem is that if you're new to Bitcoin or hoping for short-term returns, you might feel the market isn't behaving as you expect. But in reality, the market doesn't conform to your timeframe. I believe the current market performance is more a result of investor impatience and excessive use of leverage .
Many people don't realize that while other assets may outperform Bitcoin temporarily at times, in the long run, as long as currencies continue to depreciate, Bitcoin will remain one of the best-performing assets. Moreover, we'll see some specific Altcoin even outperform Bitcoin. However, if you simply choose a random three-month period to measure investment performance, the results may be as unpredictable as rolling dice.
Arthur:
I'm not currently focused on leveraged trading. Of course, there's nothing wrong with using leverage itself. If you want to become a leveraged trader, you must be highly vigilant about the market. For example, it's difficult to get a full eight hours of sleep every night because you need to constantly monitor market dynamics and set up phone alerts. You also need to understand changes in opening interest, master time-series data, and analyze global market fund flows, especially trading activity in Asia, Europe, and North America.
These are the basic skills required to become a successful leveraged trader. If you can't do these, it's best not to try leveraged trading lightly, because you haven't invested enough effort. Leveraged trading requires 24/7 focus, 365 days a year, to have any chance of success. But if you just randomly open a few positions after get off work hoping to make some quick money, you're likely to run into trouble. Again, leverage itself isn't the problem; the key is whether the trader has sufficient focus and expertise.
Host: We all know you have a unique perspective on the "catch-up trading" of Bitcoin and gold. You believe there's a significant difference between market perceptions of gold and Bitcoin. I'm curious, how do you view this issue now? And for those still focused on Bitcoin catching up with gold, how do you foresee the future?
Arthur:
In my non-crypto portfolio, almost 100% are investments in physical gold and silver mining. If I were to explain my investment logic, my core argument is that Bitcoin is a tool for people to combat currency devaluation. Anyone can own Bitcoin, and no one will know you own it. We can even keep our private keys in our minds, which is quite unique.
But central bankers face a similar problem. If you're not a central banker in the United States, you need to ensure that your country's or economy's reserve assets can withstand inflation driven by the US. For the past 10,000 years, gold has been the asset of choice for both nations and individuals to address this issue.
Therefore, if I were a central banker or government official, I would choose gold to protect myself from asset forfeiture or inflation. Gold is a historically proven solution. In contrast, Bitcoin has only existed for 15 years, while gold has a history of 10,000 years. Choosing gold is not only because of its stability, but also because it aligns with institutional tradition. As an official of a sovereign nation, if I chose Bitcoin and it failed, I could lose my job. But if I chose gold, even if problems arose, I could say, "This is our usual practice."
Furthermore, the safekeeping of gold is more traditional and reliable. We have vaults and armed personnel to protect it, without needing to understand complex cryptography or private key management. In contrast, the custody and security of Bitcoin requires new technologies and knowledge, a significant hurdle for many governments. Therefore, when I see the US seizing Russian assets, I realize that any country could potentially face the same risks. To avoid this, I would choose to store my gold within my own country's borders, protected by my own military.
Of course, as an individual, I might hold Bitcoin and believe in its value. But from a national perspective, gold remains a safer option. Therefore, in my investment strategy, I would hold both types of assets: gold and silver are tools used by the state to combat the devaluation of fiat currencies , while Bitcoin and some select cryptocurrencies are weapons used by the people to fight inflation .
While their performance may differ, their core logic is similar: both aim to combat currency devaluation. The only difference lies in their buyer groups— gold is primarily purchased by governments, while Bitcoin is chosen by individuals. This is why I hold both. I believe we shouldn't view gold and Bitcoin as opposites, but rather as complementary . If you look at the largest buyers of gold since February 2022 (when the US seized Russian funds)—it's central banks. Do you think this trend will continue? Do you foresee more conflict and division in the future? If the answer is yes, then buy gold, because governments will continue to increase their holdings.
On the other hand, if you believe countries will continue to solve problems by printing money, leading to inflation, then buy Bitcoin, because it is the people's currency and a way to combat inflation in the digitally connected age. I believe that I can profit from both trends, gold and Bitcoin. That's my view on gold. It's not an either-or choice, but rather a combination of both. While I have a higher proportion of cryptocurrency holdings, gold is also an integral part of my portfolio.
The story of Naval selling Zcash to Arthur
Host: You both hold both Bitcoin and gold; that's an interesting portfolio. I can understand why someone like Naval would choose Bitcoin over traditional gold. Next, let's talk about Zcash. I've heard you mention Naval's story a few times; could you share some details? What sparked your interest in Zcash? I remember you saying BitMEX was the first exchange to list Zcash, is that right?
Arthur:
Yes, BitMEX was the first exchange to launch Zcash futures contracts. Around 2016, Zcash was one of the hottest cryptocurrencies on the market. Zuko (the founder of Zcash) was promoting it extensively at the time, and everyone had high expectations for privacy technology, believing that Zcash could make Bitcoin more private.
At the time, I was very interested in Zcash, mainly because it used a slower token distribution method, similar to Bitcoin's mining model, only seven years later. Therefore, we launched its futures contracts even before any Zcash tokens were in circulation. These contracts were very popular in the fall of 2016. By the end of 2016, Zcash's Genesis Block was generated, and the price surged to $3,000 on Poloniex, as the supply in the market was virtually zero.
However, as mining progressed, inflation gradually emerged, supply increased, and prices fell. At the time, my biggest concern about Zcash was its "Trusted Setup." This setup required users to trust the Zcash development team to complete the initialization process. Although they demonstrated the transparency of the entire process through live streams, certain risks still existed. Furthermore, 20% of Zcash's mining rewards were allocated to the founding team, which also sparked some controversy.
Another criticism in the market is that a large portion of Zcash in circulation does not have privacy protection features enabled. This makes Zcash seem like a "downgraded" version of Bitcoin, as it was launched seven years later and its network effect is far weaker than Bitcoin's.
Therefore, for a long time, I didn't pay much attention to Zcash. Until one time, during a privacy-related interview, I happened to have dinner with Naval. We talked about Zcash, and I congratulated him. He told me, "Yes, this is only my second biggest bet. I think Zcash is the last project in the cryptocurrency space with the potential to achieve a 1000x return. " This statement piqued my interest.
He then addressed my concerns about Zcash one by one. He mentioned that Monero's privacy performance was not perfect, especially in the era of AI and big data proliferation, and that some researchers in Japan had already been able to deanonymize Monero. He also pointed out that Zcash had removed the original "trusted settings" in the Halo 2 upgrade, and that mining subsidies had been gradually ending two years ago.
After listening to his analysis, I began to re-evaluate Zcash. Naval is a very successful investor, and many of his judgments are remarkably accurate. Therefore, I decided to adopt a "invest first, research later" strategy. During dinner, I contacted my broker and bought some Zcash. Interestingly, all six of my brokers were unwilling to let me trade, which only strengthened my resolve to invest.
After returning home, I began to verify all the information Naval had mentioned and found that what he said was indeed true. Zcash's technological improvements, its potential for privacy protection, and the elimination of mining subsidies all filled me with confidence in its future.
From then on, I began to fully commit to investing in Zcash. At the time, Bitcoin was priced at around $110,000, while Zcash's price continued to rise. I enjoyed seeing the market's enthusiasm for Zcash; both praise and criticism made me feel the vitality of this asset.
Ultimately, I decided to continue adding to my Zcash position. I believe it has the potential to reach 20% of Bitcoin's value. My investment plan is nearing completion, but I might buy more if the price pulls back. Recently, Zcash's price has rebounded from a low of $400 to around $500, and I believe that as more people understand its privacy features and operating methods, Zcash's price will rise again.
At the same time, I'm also trying out some new wallet technologies to ensure I can operate them proficiently. I'm ready to continue in this market.
The era of privacy and zero-knowledge proof (ZK) technology is coming.
Host: Recently, I noticed Murt promoting Zcash. He mentioned that in the next five to ten years, the focus of cryptocurrency will be adding a privacy layer to existing infrastructure and systems, essentially making all cryptocurrencies privacy-preserving. What are your thoughts? Do you think we are about to usher in a new era of privacy technology?
Arthur:
Of course, because AI technology is already very advanced. Whether you call it AGI or something else, it's essentially a powerful predictive engine. Governments will use these technologies to gain complete control over our digital lives. Whether this control is good or bad, we all become more vulnerable in the process. Our voluntary use of smartphones and social media is, in fact, the largest act of voluntarily providing data to governments. We upload photos, share locations, and send chat logs simply because we want to connect with the world through the internet, to experience a sense of community, and to enjoy the convenience that technology brings, at the cost of our privacy being sacrificed.
Many people worry that China will acquire our data, but I want to ask: Do you use Google? If so, your data has already been handed over to the US government. So the issue isn't about China, but about who is more trustworthy . Regardless, privacy is no longer an option. Without zero-knowledge proof (ZK) technology to protect our privacy, our personal data will be easily tracked and deanonymized by these systems. The significance of zero-knowledge proofs lies in their ability to verify your identity (e.g., confirming you are Arthur Hayes) without exposing more personal information.
There's a lot of discussion about ZKYC (Zero-Knowledge Proof-Based Identity Authentication) right now. I think this technology will be very important because it can prove a user's identity while protecting their privacy. This is especially crucial for those who want to run AI technologies but don't want their data exposed on the global network.
Therefore, I have complete faith in the future of privacy technology. As people realize that governments could potentially use AI to monitor and control our behavior, the demand for privacy will increase dramatically. Perhaps Zcash is one solution. I am indeed seeing the discussion surrounding privacy protection become a movement, with more and more people starting to pay attention to this issue.
How to find a balance between long-term vision and short-term transactions
Host: You once mentioned a project called "Hype," which achieved a 126x return, and you chose to sell when the price increased by 10%. How do you strike a balance between long-term investment beliefs and short-term market fluctuations? For example, how do you deal with market unlocking events or the behavior of other investors?
Arthur:
The best investors can accept two seemingly contradictory viewpoints simultaneously. I believe in the long-term potential of an asset, but in the short term, my goal is to maximize my Bitcoin holdings. For me, all investment operations are aimed at generating returns, which ultimately translate into holding more Bitcoin. This is my core objective.
For example, ideally, I could buy Hype at a certain price and then sell it when the price triples, accumulating more Bitcoin with the profits. I would wait for a price pullback before re-entering the market. Through this strategy, I successfully increased my Bitcoin holdings. As a professional trader and investor, I enjoy this process.
Of course, if you're an investor who prefers long-term holding and isn't interested in short-term fluctuations, that's perfectly fine too. If you believe a project can achieve a 126-fold return, you can choose to buy and hold, even if it requires waiting 12 months or longer.
However, I adjust my strategy based on market dynamics. If I believe the market may be entering a period of weakness, or that new products need to be launched to support higher valuations, I will choose to sell and wait for a better entry opportunity. If a project proves its value and outperforms its competitors, I will consider buying back in.
For example, new products like Nvidia's stock perpetual contracts are very attractive to me. I will work with the team to evaluate whether these projects are worth investing in for the long term. While I still believe the Hype project has the potential for a 126x return, I am willing to wait for the market to develop and validate it. I have ample time to observe and adjust my strategy.
Host: You clearly have a very positive view of the Hype project, and I know you're also very interested in the development of perpetual contracts. As the inventor of perpetual contracts, you're no longer directly involved in the development of these protocols. Does this change seem a bit strange to you, watching these projects grow and thrive in the market?
Arthur:
Actually, not at all. I'm more focused on enjoying life now, like skiing and traveling, rather than managing a team or handling day-to-day tasks. I think this is a good state to be in. People like CZ can handle these things. I've fulfilled my mission, and I'm very satisfied now.
Host: So you have that "I've done my job and now I can step back" feeling?
Arthur:
Yes, absolutely. There are many young, energetic people ready to make their mark in this field. I'd love to see projects like Hyperliquid completely disrupt CME and render it worthless. I'd be thrilled if that happened, without needing to directly profit from it.
I support these projects because I believe in their potential. I've been in this industry for years, and I hope to see Hyperliquid or other companies like Binance or BitMEX force people to choose between perpetual contracts or exit the market by changing how market flows.
If all of CME's products become perpetual contracts, it will prove that the innovations we made at BitMEX were correct. Perpetual contracts have become one of the most successful products on exchanges worldwide. This also proves the capabilities of Jeff Yang's team—they only have 11 people, yet they've developed such a remarkable protocol. I met one of their team members at a party a few days ago, and she told me that their team still only has 11 people. That's really cool, and I'm proud of them.
Host: That's incredible, 11 people! How big was the BitMEX team back then ?
Arthur:
We have 250 people. Actually, I've discussed Hyperliquid with the Paradigm team, and we agree that keeping the team small is more advantageous. Once the team grows, all sorts of problems arise, such as personnel conflicts or having to lay off people. These are not things I want to deal with. As CEO, I've spent most of my time in the past resolving personnel issues rather than focusing on making money, and this is not the way I want to work.
Host: I noticed you recently bought some Uniswap ( UNI ) tokens, though not a large amount, but you bought them after they launched their fee system. What are your thoughts on this project?
Arthur:
I believe that in the short term, the cryptocurrency market may exhibit strong bullish sentiment towards Uniswap. More importantly, however, this mechanism paves the way for regulatory clarity in the US, allowing for the development of more utility tokens within a legal framework. This also creates opportunities for better token projects in the future.
We are moving towards a future brimming with growth and innovation. Tokens like Uniswap are generating millions of dollars daily, reinvesting those profits back into the market. These tokens are more than just governance tokens; they deliver long-term value growth. In the future, we will see more similar "pseudo-equity tokens." These tokens not only generate profits for the company but also align the interests of token holders.
Host: Do you think this "pseudo-stock token" model will become the mainstream in the future?
Arthur:
I believe it will. Every cryptocurrency cycle gradually moves in this direction. In the past, we always heard founding teams promise to distribute profits to token holders, but in reality, they often failed to deliver on these promises.
For example, Uniswap's price once reached $35 to $40, but later fell to $3 to $4. Another example is dYdX, the original Hyperliquid project, which once had a market capitalization of $28 billion to $30 billion, but is now almost worthless. They certainly made a lot of money, but token holders received nothing in return.
In reality, many token project founding teams have failed to deliver on their promises, for whatever reason. For example, Uniswap's token price peaked at $35 to $40, but later plummeted to $3 to $4. Then there's dYdX, the original Hyperliquid project, which introduced innovative concepts like permissionless listings, causing its market capitalization to soar to $28 billion to $30 billion, but is now virtually worthless. These projects certainly made a lot of money, but token holders didn't benefit.
Many new tokens launched in 2023 and 2024 suffer from high market capitalization and low liquidity. They lack clear product-market fit and a sufficient customer base. Even when they generate revenue, these profits are not returned to token holders. As a token holder, I also hope to profit from a project that performs well.
Projects that truly deliver on their promises, like Hyperliquid, demonstrate that even without venture capital backing, a strong technical team and the ability to return wealth to token holders can lead to tremendous success. We support your project by purchasing your tokens, but if you only offer excuses like "regulatory issues," "governance issues," or "DAO voting" without providing any returns, your project will ultimately be eliminated by the market.
How should we view this cycle?
Host: I recently saw some senior industry insiders on Twitter saying that this cycle is the worst ever, completely incomparable to previous cycles. What are your thoughts on this cycle?
Arthur:
Each cycle has its own theme. And in each cycle, there are always some people who made money in the previous cycle who scoff at the new themes, thinking they're not serious enough or just "toys for young people." In reality, this is simply because they feel frustrated that they missed out on opportunities in this cycle.
I firmly believe that market price is the most important factor. The most crucial elements of cryptocurrency are price and market, enabling people to trade these things. Market fluctuations are normal; I understand. That's the essence of cryptocurrency. People used to consider dialogue in movies vulgar, women in short skirts on television vulgar, and the internet vulgar. Therefore, every technology that defines the next era is considered vulgar by people of the previous era.
If you tell me that memes are vulgar and NFTs are trash, then I'll actually be interested in these "vulgar" things, because they might be the mainstream of the next cycle, and that's why I'm willing to invest in these projects.
Host: Culture does indeed always develop in this way. Those things that are most controversial and conflict-ridden are often the ones that ultimately succeed in overcoming obstacles.
Arthur:
This is precisely the law of technological development. Each generation feels threatened by the innovations of the next generation. Meanwhile, the new generation hopes to drive social progress through these new things. It's a natural cycle.
The older generation often says, "Today's young people..." If you invest in things that interest the new generation, those things will become the norm in society when they grow old. And that's precisely where worthwhile investment lies.
Host: So, Arthur Hayes, how do you avoid being left behind by the times? How do you stay sharp and keep up with the times after achieving success, instead of becoming outdated?
Arthur:
The most important thing is to connect with people, truly understand these new things, and actively participate. I like to travel around, see what people are doing, and what young people are interested in. You can't just sit in an office discussing traditional financial products like government bonds or Bitcoin ETFs with private bankers. While those can make money, you have to keep moving forward if you want to stay young. If you stagnate, you'll gradually decline and eventually be left behind.
Whether it's exercising, communicating with people, or understanding what they're doing, if you don't try to participate, you will gradually "die." This is a natural law of the universe. If you're unwilling to delve into the thoughts of the younger generation, or unwilling to attend meetings and observe new trends, you will ultimately stagnate. This state might last for a while, but eventually you will be eliminated.
Therefore, I will strive to stay relevant. Of course, there are others who are better at keeping up with trends than I am, but I genuinely enjoy the changes in the market. If I love the market and want to understand how things are developing, especially in the cryptocurrency space, then I must observe closely, or at least stay informed. Even if I'm not actively involved, I must constantly monitor trend changes.
Advice for cryptocurrency newcomers
Host: There are many young people watching this live stream right now, many of whom are new to cryptocurrency, especially those who entered the market in 2024 due to the rise of Solana. They may feel confused, as there are many voices in the market, such as "You only have two years to succeed, otherwise you'll be stuck at the bottom forever." There are also suggestions, such as GCR's approach of doubling wealth through high-risk investments. This atmosphere makes many people feel immense pressure and even somewhat overwhelmed.
So, if you were in this environment, what advice would you give to these beginners? How can they adjust their mindset and find the right direction?
Arthur:
First, I want to say that time and compound interest are two of the most powerful forces in the world. You may have heard the fact that, assuming an inflation rate of 2%, the real purchasing power of the dollar has decreased by 99% since 1913. This shows that even small changes can have a huge impact over time.
Therefore, my advice is to put aside those "high-risk, get-rich-quick" ideas for now. You can observe your emotions and understand this eagerness for quick success, but don't let it control you. Tell yourself that if I can achieve a 5% compound annual growth rate over a certain period, instead of suffering huge losses in pursuit of high returns, then over time I can still accumulate considerable wealth. This is a simple mathematical principle, but it requires patience and discipline to execute.
If you really want to try high-risk trading, such as leveraged trading, then you need to be fully prepared. High risk means you must become a full-time trader, constantly monitor market dynamics, deeply understand the market's microstructure, be familiar with the products you trade, understand the liquidity of the market, and know who is trading, when, and why. If you are willing to commit fully and have sufficient knowledge, then you can consider using leverage.
However, if you can't do that, then long-term investing is a better option. You can set a fixed savings percentage, and once that's set, don't focus on market fluctuations too frequently. If you don't have enough time and energy to learn the skills of high-risk investing, then all high-risk trading will only lead you into financial trouble.
