Arthur Hayes: We are now in the mid-cycle; DAT may experience a collapse similar to FTX.

Author: Kyle Chasse, Translated by: Aki

In this interview, BitMEX co-founder Arthur Hayes discusses macro policies, liquidity, and the pricing of crypto assets. He analyzes and predicts that the United States will enter a phase of simultaneous interest rate cuts and fiscal expansion; stablecoins, as “price-insensitive buyers” of U.S. Treasuries, will weaken the power of the Federal Reserve; funds will be transmitted to the blockchain via stablecoins, preferring DeFi protocols that offer repurchase, dividends, and verifiable cash flows. Bitcoin is viewed as a core asset to hedge against the depreciation of fiat currency, and he also shares his views on the growth path of Hyperliquid, the risks of token unlocking, and the capital operations of “digital asset treasury shares.”

Federal Reserve Interest Rate Decision: Cut by 25 Basis Points

Arthur Hayes: I haven't checked the latest position of the 2-year U.S. Treasury yield today, but over the past week and a half to two weeks, following the Non-Farm Payrolls (NFP) release and the downward revision of U.S. employment data, the 2-year yield has generally declined by about 50-60 basis points, and the PPI two days ago was below expectations. Moreover, Powell has clearly shifted at Jackson Hole, opening the door for interest rate cuts. I tend to believe that the probability of a 50 basis points cut at this meeting is higher. I also think that Trump and his supporters would prefer more aggressive easing, which is why he continues to pressure the decision-makers. (This podcast was released on September 13, and some information may be outdated; subsequently, the Fed announced a 25bps cut ).

I believe that like every U.S. president before him, each president will ultimately achieve the monetary policy they desire. There are historical precedents for this: Lyndon B. Johnson reportedly pressured then-Fed Chair William McChesney Martin to lower interest rates during a face-to-face meeting at his private residence in Texas; during Nixon's presidency, there was comprehensive pressure on Arthur Burns (in coordination with Treasury Secretary John Connally and others) to ensure that interest rates fell. Similarly, Trump's strong pressure on Powell follows this pattern. Like past Fed officials, Powell will eventually implement the monetary policy that the political sphere desires: lower interest rates. It may take longer than you think, but the direction will not change.

Therefore, I believe we are in a rate-cutting cycle. Although I personally judge that inflation will still be quite sticky in the next 18–24 months; if you do not hold hard assets such as gold or Bitcoin, or stocks that are performing well in the U.S. market, you will feel the pressure of higher inflation.

Kyle Chasse: So your judgment is that interest rate cuts will continue all the way until 2026. How will this proceed? How many times will there be?

Arthur Hayes: Ultimately, the number of times does not matter. Bessent and Trump need to issue more currency to support their agenda, so the Federal Reserve will lower interest rates. Even if it doesn't directly restart QE, it will still “print money” in various ways: perhaps through the mortgage market, perhaps through bank credit, various arrangements between Trump and foreign sovereign wealth funds, or by allocating about a hundred billion dollars in “equity capital” to the Department of Defense (DoD), leveraging to invest in resource companies like MP Materials to address several structural issues. In short, there are too many paths to provide credit; of course, the degree of benefit will vary among different sectors. The advantage of Bitcoin is: we do not care where this money specifically flows. As long as more and more US dollars, Chinese yuan, euros, and Japanese yen are in circulation, these fiat currencies are depreciating; and we hold a fixed-supply asset, its price may tend to rise asymptotically.

Does Bitcoin's “business cycle” really take precedence over the “halving cycle”?

Kyle Chasse: We recently heard an interesting perspective. The cryptocurrency market often talks about a “four-year cycle”, believing that Bitcoin generally operates along the rhythm of “halving”. However, another view is that Bitcoin actually follows the “business cycle”, and is likely nearing its end in the coming months. His reasoning is mainly due to: insufficient disposable income for retail investors, signs of slowing consumption, and weakening employment; once this happens, corporate profits will be under pressure, the stock market may decline, and the overall market could experience a systemic downturn. Do you think we will reach the end of this bull market this year, or will it continue to extend?

Arthur Hayes: I believe we are entering the “midpoint” of this cycle. Think about it: Trump, as the president reinstated after the Biden administration (his second term), has a highly populist style. During COVID, he made the largest move for “direct benefits to the people” since Andrew Jackson (or more aptly, Lyndon B. Johnson, LBJ) through cash relief checks (stimulus checks). This is not a traditional Republican fiscal approach — keeping people at home (he referred to the pandemic as the “flu”), while stabilizing the situation by distributing money.

This approach demonstrates his political instinct: not being bound by ideology to win elections. Winning elections means continually providing direct benefits to the people. He did this during the COVID period; he also did it in 2017 with massive tax cuts; and he will continue to do so. Otherwise, Trump and the Republican Party will face the risk of being voted out in 2026 (mid-term elections) and 2028 (presidential election). So he is very clear about his path: continue to “give out money” (direct benefits) and “print money”.

It is evident that the Federal Reserve and certain individuals within the bureaucratic system of the U.S. government have been hindering its progress. However, the dominoes are being knocked down one by one—by mid-next year, the Federal Reserve will fully pivot: Powell's position will be more consistent, potentially securing 4 votes among the 7 governors; in addition, there will be operations through unconventional fine-tuning such as interest on reserves and the discount window. Bessent is advancing transactions with sovereign wealth funds, which may end regulatory custody, adding about $4-5 trillion in mortgage-related credit supply—allowing residents to re-leverage their housing in the mortgage market. Therefore, if residents run out of cash, what will American consumers do? They will go for loans. And if I lower the cost of funds (interest rates), they can borrow more. This is why “the cost of funds” is crucial in this context.

Of course, what I personally value more is the amount of currency. But I can also understand: even if one believes that the American household sector is over-leveraged and the housing market is slightly overheated, if I were to lower the interest rate from 4.5% to 2%, then households would leverage up, buy more stocks, max out credit cards, buy new cars, and take out a home equity loan. If you agree that the Federal Reserve is about to cut interest rates, and that Trump will release liquidity in the Federal Reserve's balance sheet and the mortgage market, then explaining the outlook solely with “weak consumption” is too shortsighted.

One more point that is often overlooked: Wells Fargo has recently been effectively “paroled.” Since the false account scandal in the early years, it has been unable to expand its balance sheet for many years. I can't recall the details, but I remember that in mid-June or early July of this year, regulators finally allowed it to expand its assets. Zoltan Pozsar (a well-known macro analyst) estimates that Wells Fargo currently has about $450–500 billion of balance sheet capacity available for purchasing U.S. Treasuries and other bonds. This means that the U.S. commercial banking system has gained another liquidity engine. So, I am not concerned with how outsiders describe the so-called “real economy”; what I focus on is credit, and credit flows — ultimately it will flow into Bitcoin.

Gold and Stablecoins: Are De-Dollarization and “Re-Dollarization” Happening Simultaneously?

Arthur Hayes: I wrote an article titled “Buffalo Bill” and presented it at the WebX conference in Tokyo. My core point is that Bessent is facing a problem called de-dollarization. In 2008, the U.S. government effectively defaulted (essentially choosing another path) and decided to bail out the banking system instead of allowing credit contraction to clear the bad debts in the system. As a result, overseas creditors are thinking: since the U.S. no longer maintains the value of its currency, why should I hold these bonds? I want to buy gold. You can see that the share of gold in foreign exchange reserves held by central banks around the world has been rising steadily since 2009.

Ultimately, the Southern Hemisphere and the resource and labor suppliers of BRICS produce goods that the Western world needs; the era of them selling things cheaply to the U.S. and Western Europe has ended. They will ask: since you are depreciating your currency at an annual compound rate of about 8%, why should I work so hard to accumulate such assets? I might as well buy gold instead. Therefore, Bessent will ask: who will buy the national bonds I need to issue? During Trump's term, the federal deficit did not decrease, but rather expanded (as I expected). And in order to deliver benefits to the public, Trump's spending will only increase. So who will buy these bonds? For a long time, no one is willing to take them because of duration risk, interest rate risk, and a surge in supply. Thus, he cannot issue 5, 10, or 30-year bonds at the scale he desires and has to turn to the short end, which is the T-Bill (short-term Treasury bill) market. The balance of reverse repurchase agreements (RRP) was around $2.5 trillion. His predecessor Janet Yellen (or one of the officials in her team) decided to increase the issuance of T-bills, effectively “sucking” that money back into the system. Starting from September 2022, this amounted to a $2.5 trillion “stimulus”; at that time, against the backdrop of Powell continuing quantitative tightening (QT) and raising interest rates, Yellen's actions substantially boosted the market—crypto, gold, and stocks all rose. But this wave has ended. Next, who else can take these T-bills?—Bessent needs to issue tens of trillions of dollars every year.

First will be the Eurodollar market. There is a large stock of offshore dollars that are not directly monitored by the U.S. federal government, and they may be doing things that the U.S. government does not want them to do — for example, financing projects that China wishes to advance, rather than those that Trump wants to promote. So, why don't they come to buy U.S. T-bills?

My idea is that Bessent can remove the “implicit guarantee” on eurodollar deposits. Historically, when the banking system (outside the U.S.) has problems, the Federal Reserve and the Treasury quickly come to the rescue by opening dollar swap lines, ensuring that banks in Europe and elsewhere holding offshore dollars have liquidity, thus preventing default. — — If this implicit guarantee is removed, what should I, as someone holding dollar deposits in foreign banks, do?

I can hold stablecoins. Stablecoins are essentially “backed” by the U.S. government: dollar-pegged stablecoins represented by Tether and Circle either keep funds in regulated U.S. commercial banks (if they are “too big to fail (TBTF)” like JPMorgan, Citibank, etc., there exists an implicit government guarantee), or allocate to T-bills. Moreover, after the regional banking crisis in 2023, we can almost assume that all deposits in the U.S. banking system are, in fact, government-backed. Therefore, if I deposit 1 dollar in a U.S. bank, there will be no situation of it “disappearing” — the government will always bail out the banks. If I hold T-bills, that is a liability of the U.S. government; and the U.S. government has a dollar printing machine, which theoretically can print money indefinitely and at nearly zero cost.

If the underlying assets of stablecoins are legally required to be bank deposits or T-bills (for example, through the GENIUS Act or other legislation), then my money is equivalent to being guaranteed by the U.S. government; conversely, if the implicit guarantees of offshore dollar deposits are removed, the risks are higher. You have already seen European strategists worrying: if Trump does not agree with their geopolitical orientation, will he cut off the dollar swap lines with the ECB or other central banks? Trump has previously threatened similar actions — this is indeed worth being alert about.

Secondly, there is a large population worldwide that actually “wants US dollars,” which is one of the reasons Tether has become popular globally. In the United States, Tether is not as popular because Americans already hold US dollars and have bank accounts; transferring US dollars is relatively convenient and low-cost. However, in Latin America or emerging markets in Asia, local currencies often face high inflation, and deposit rates are lower than the nominal GDP growth rate, leading to the erosion of residents' actual purchasing power by the banking system and political circles. What they need is US dollars (if still denominated in fiat currency). However, regulators do not want you to hold US dollars directly; they prefer to dilute your wealth through local currency inflation. Thus, they limit the entry of large foreign banks and the provision of dollar-denominated banking services. So what to do?

Almost everyone has a Facebook account, and they all have a Twitter/X account. The super apps of Western tech giants are now likely to be “greenlit” to provide banking-like services. You will see WhatsApp launching payments, and you will also see X launching payments. If local regulators complain about “losing control over residents' funds,” it is because Zuckerberg, Musk, and Bezos have “control” over these funds through their respective apps — —

Then Trump would sanction them: “You are unwilling to let American tech companies operate freely in your country? Your companies operate in the United States, then we will impose a 100% tariff on you.” For example, the powerful politicians in Asia, the money they extort from their own citizens is probably all sitting in high-net-worth accounts at JPMorgan — I would sanction you too. The result is: unless you unconditionally allow our large tech companies to operate in your country, your access to dollars will be cut off.

As a result, those in the Global South who want “dollar accounts” but are blocked by local regulations will be concentrated and “connected”: allocating T-bills (or other dollar assets) to them, with yields of 1%, 2%, or 3% significantly outperforming their holdings in high-inflation currencies like Philippine peso and Argentine peso. This is what I refer to as the approximately $34 trillion TAM (Total Addressable Market) — a potential funding pool for stablecoins.

From a geopolitical perspective, Bessent is advancing in line with Trump's interests. You have seen them making a big push for stablecoins. Previously, there was a report submitted to the U.S. Treasury (I can't recall the specific month) estimating that about $2 trillion would flow into stablecoins, explaining the operational mechanism to the Treasury. Clearly, they believe this is beneficial for U.S. monetary policy. Next, they will let the private sector extend the “tentacles” of stablecoins globally, and this capital will flow back to purchase T-bills — this is the ultimate goal. They are not concerned about any “innovation”; the core is to have price-insensitive buyers take U.S. Treasury securities. This is my overall conclusion about stablecoins.

Clearly, all of this will be transmitted layer by layer to DeFi. Once I hold stablecoins, I possess the building blocks of DeFi “LEGO”: I can lend, leverage, trade, and so on. At this point, I am also familiar with the use of digital wallets, and the use of MetaMask, Phantom, etc. in the global DeFi ecosystem will become very natural. This will also boost some of the projects I mentioned in the article, such as Ethena, EtherFi, Hyperliquid, Codex, etc. In summary, this is my macro framework regarding stablecoins and DeFi protocol layout.

In the scenario of “$34 trillion entry”, do stablecoins marginalize the Federal Reserve?

Arthur Hayes: I assume that there are about 10 trillion dollars worth of stablecoins circulating in the market. Taking the protocols I presented as examples (such as Ethena), I believed at the time that the return potential was about 51 times. My logic is that investors will chase higher yields; in the context of declining U.S. Treasury yields, they will use synthetic dollars and take advantage of basis trading on Bitcoin to generate returns. As for EtherFi, I estimate the magnitude to be about 34 times: when users can consume and use stablecoins in “offline or offline payment scenarios” and bank-like services (the functions provided by EtherFi), the incremental demand will be effectively met.

As for Hyperliquid, there is generally a potential for a 120-130 times increase: when a large number of users holding stablecoins wish to trade on-chain, it is expected to grow into one of the largest exchanges in the world. Why do users choose on-chain trading? Because the threshold is lower, more user-friendly, and high leverage and related products better match demand. I will likely focus here. Obviously, Bitcoin itself will perform well, but I can't provide specific numbers; in terms of the elastic amplification effect, it doesn't match the aforementioned track.

Kyle Chasse: You also mentioned that stablecoins might marginalize the role of the Federal Reserve. Could you explain that in more detail?

Arthur Hayes: The importance of the Federal Reserve lies in its setting of short-term interest rates: determining the effective federal funds rate and establishing its target range; also managing interest on reserves (IOR), which is typically at the lower end of the range; and setting the overnight reverse repurchase agreement rate (ON RRP), which is usually at the upper end of the range. If the Treasury is issuing bonds and selling T-bills to profit-seeking private entities, and the rate provided by the Federal Reserve is higher than the rate on my T-bills, then the funds will move directly into ON RRP or be deposited in banks, borrowing from the Federal Reserve at the interest on reserves rate. As a result, the Treasury's bond issuance rate cannot fall below the lower limit of the Federal Reserve's range.

But if a stablecoin issuer is legally restricted to only depositing underlying assets in banks (but TBTF banks do not lack deposits, and interest is almost zero), or buying T-bills; cannot enter ON RRP, cannot buy other “novel” financial assets — because I have written the rules into law, you can only do these two things.

In this framework, the short-end interest rate is determined by me: the new marginal funds no longer come from money market funds, but from stablecoin issuers. They have a large amount of dollar positions and need to earn a spread, so they must accept the yield I (Secretary Bessent) offer. If I believe the economy needs a 2% short-end interest rate, I will sell T-bills at 2%. However, there will still nominally be an effective federal funds rate (assuming I cannot directly control the Federal Reserve Board), but market trading will move downward around the T-bill yield I set (for example, by a margin of low 100bp).

Because stablecoins are regulated to be used only for purchasing the things I specify, I can sell them to you at the price I want. Unless the Federal Reserve cooperates, but this is a combination of tools that undermines the real power of the Federal Reserve.

Kyle Chasse: Matt Hougan recently stated that stablecoins do not harm the economy; they simply take profits away from banks because in DeFi, the savings side can directly fund the borrowing side. Do you agree with this view?

Arthur Hayes: Unless one or two commercial banks actively embrace stablecoins, I believe the commercial banking system will be marginalized. This is also why whether stablecoins pay interest is a “big issue” — the issuers can completely pay interest directly. So why should I still keep my money in a JPMorgan account? The interest rate for demand deposits at JPMorgan (or TBTF banks like Citi, Wells Fargo, etc.) is probably only about 1.5%–2%. Meanwhile, the target range for the federal funds rate is 4.25%–4.50%, and the yields on money market funds are even higher. So the result is that depositors can easily transfer their money to stablecoins with just a couple of clicks, or banks are forced to raise rates to match stablecoin rates, compressing their own profits.

The biggest advantage of stablecoin issuers lies in their extremely simplified manpower and processes: compliance and KYC automation, no outdated technology stacks left over from the 90s, and no high-paid but inefficient management layers. I mentioned that Tether might be the “most profitable bank per capita” in human history: with a workforce of about a hundred, the profit per employee could be in the hundreds of millions. This is essentially what banks are supposed to do: absorb your funds and pay interest on them; while you hold this quality collateral, leveraging, trading, and earning more returns in the DeFi Lego system — if you wish. As for me, as a “bank,” I only need to do simple and reliable things: safely transfer your money from point A to point B. In contrast, in TradFi, we allow banks to engage in all sorts of messy businesses, which I find very unsatisfactory.

From the perspective of “fiat currency depreciation (currency dilution)”, Bitcoin is the best-performing asset in history. Yes, the S&P 500 is rising when priced in USD, but when converted to gold, the S&P 500 has not returned to its pre-2008 crisis high in gold terms since 2009; the housing market has similarly not recovered when priced in gold. The only assets that have truly performed better in gold terms may be a few leading US tech stocks. When everything is converted to Bitcoin pricing, other assets are almost negligible on the chart — this highlights Bitcoin's exceptional performance in the “currency devaluation trade.”

Let's talk again about the differences between TradFi and crypto. Essentially, there is no difference: TradFi investors also believe that once the situation demands it, central banks/agencies such as the Federal Reserve, Treasury, BOJ, ECB, PBOC, and SNB will inject liquidity (print money); they also know that the typical practice is to buy bonds. Therefore, in their framework: buying 10-year US Treasuries from 5% down to 4%, combined with 30 times leverage, can yield considerable returns — many macro investors (like Ray Dalio) have long been engaged in this duration trading as interest rates decline. Our belief does not conflict with that of TradFi: everyone believes money will be printed; the only difference is that we have chosen “a faster horse” (more elastic assets) in crypto, and Bitcoin has historically performed the best on this mainline.

If you only focus on a few months' window, like asking “Why hasn't Bitcoin reached $150,000 yet?”, I can only say: those who bought in just six months ago might be disappointed; but those who invested two, three, or fifty years ago are mostly seeing significant gains, far exceeding the depreciation of the dollar and other fiat currencies. Therefore, there's no need to get emotional just because Bitcoin isn't “breaking historical highs” every day. The S&P 500, whether it's at 6,700 points now or at other levels, is still priced lower in gold compared to pre-crisis levels. Everyone needs to adjust their expectations: if you're hoping “to buy Bitcoin and drive a Lamborghini tomorrow”, you're very likely to be liquidated due to incorrect leverage and expectations.

Who will be the biggest beneficiary if stablecoins see a trillion-dollar increase?

Arthur Hayes: Maybe it's Lido, and things related to ETH staking. Let me emphasize again, I'm not the “do everything” type of person; my portfolio is very concentrated, and I'm very familiar with the fundamentals of my holdings. I can't say these will yield 1000x returns; if you go buy a low-quality meme coin with a market cap of about 5 million dollars, and then it skyrockets, you might actually earn more than I do.

But I am not willing to take on that kind of risk. I need to deploy a large amount of capital in a few targets, and I won't be staring at my phone 24/7. The type of investment will affect your choices: you might say, “These targets can't give me 1000 times the return” — I completely agree. But these products — all have product-market fit (PMF), thousands of users, annual revenue measured in billions of dollars, and they won't disappear at any moment.

Kyle Chasse: I want to ask a point that I'm personally very interested in. When you and I were chatting in Singapore last time, you mentioned HYPE (I felt like I had already missed it at that time; now it seems to have almost doubled). It has always caught my attention, but I haven't bought any so far. Given the current FDV of about $57 billion, do you think there is still significant upside potential?

Arthur Hayes: I'm not sure about the current number of their employees; when I last spoke with Jeff, there were about 10 people, and now there may be a slight increase. Based on my experience running a large exchange, this team's code delivery capability is extremely impressive. The Ethena team has about 20 people. These small and elite teams focus on refining a specific product, delivering quality far superior to many centralized companies. Hyperliquid is a leveraged derivatives trading platform, currently expanding its spot offerings through the HIP-3 permissionless listing mechanism, and perpetual contracts can also be listed without permission now. Many protocols have tried similar approaches before, and dYdX is one of them, performing well; but unfortunately, they did not return the real profits earned to token holders, which is why their tokens performed so poorly… I believe Hyperliquid's next goal is to surpass Binance. How will it move from now to becoming the №1 exchange globally in any form? Clearly, it won't be easy and will require a lot of work and luck.

But this is exactly the direction I am betting on, and I see it moving in the right direction. The active participation of major stablecoin issuers in USDH-related proposals is enough to demonstrate Hyperliquid's core position in the crypto trading ecosystem, and the prospects are excellent, while the continuous improvement of awareness will only get better. The only thing that makes me a bit concerned is that there will be a huge team token unlock in November, at which point we need to see how the positions and structures evolve. As I mentioned in my speech, if a large-scale expansion of stablecoins occurs as I envision, my target return range for 2028 is over 100 times. This is why I expressed a bullish view on HYPE on stage.

If ultimately around $10 trillion flows into stablecoins, Hyperliquid is expected to grow into one of the largest trading platforms in the world. As for the issue of “currency depreciation” — the crux of it is: it forces those without substantial financial assets to become speculators. Because they will think: I can’t afford a house, can’t buy a whole Bitcoin, can’t do the things I want to do.

But there are leveraged trading platforms out there — as long as I bet on a certain shitcoin or pick the right meme stock in this “American-style casino” stock market, I might be able to buy a car and pay off that “worthless” student loan for my degree. This is extremely bad for society, but those in power have chosen to build such a system, and most people have gone along with it.

Is this year's DAT model likely to be the fuse for the “FTX Moment”?

Arthur Hayes: The information currently available is that I have served as a consultant for a certain Solana ecosystem-related project, so I instinctively believe that the “meta-narrative” of DAT will continue to evolve within the corporate finance circle of TradFi. However, I think there will ultimately only be one or two winners in each mainstream asset's track. In the Bitcoin track, MicroStrategy is already there. It is very difficult to create a “Bitcoin DAT” that surpasses MicroStrategy. There are attempts like Block.one in the market, but shaking Michael Saylor is not easy. In the ETH track, there are companies like Bitmine; in the Solana track, there are Upexi and other projects; almost any mainstream chain will have corresponding DAT model companies.

For investors, the key is to see clearly this set of “corporate finance alchemy”. If I can push the stock price, trading volume, and liquidity high enough, I can unlock a whole set of institutional funding channels (allowing me to issue/sell debt and equity derivatives). The higher the stock price and the bigger the “narrative”, the more “diverse” capital structure tools I can design, thus continuously “rolling in” more Bitcoin or other targets into the balance sheet, thereby increasing shareholder equity. This is a game about scale, distribution, and channels.

Michael Saylor has proven that there is a large group of underperforming fund managers and indexed funds who wish to gain exposure to the risk volatility of Bitcoin and its excellent risk-return ratio, but they cannot purchase Bitcoin ETFs (which, under many advisory/mandate constraints, are regarded as currencies or commodities and fall outside their authorization); they cannot self-custody Bitcoin (it is not within their functions/processes). Therefore, they can only buy stocks of publicly traded companies. If you can push a publicly traded company that holds crypto assets into their “compliance basket,” they are willing to spend $2/$3/$10 to acquire $1 of net assets — this is not “irrational”; they are simply following the rules. However, in this game, ultimately there may only be one or two winners in each track.

Of course, in the later stages of the cycle, new issuers will emerge, resorting to more aggressive corporate financial instruments to pursue greater stock price elasticity. When prices decline, these practices will backfire. I believe that a large DAT incident will occur at the bottom of this cycle: FTX collapsed during the bottom phase, and BlockFi also faced issues at the bottom, similar to scenarios where Bitcoin retraces 70% from $1,000,000. At that time, these companies will face failures, and their stocks or bonds may experience significant discounts, providing global secondary market arbitrage funds with opportunities to “buy the dip - compress the discount - unlock the crypto assets in the vault.”

How to face if Q4 market sentiment is extremely exuberant from a historical perspective?

Arthur Hayes: What I care most about is the market's expectations and path regarding “printing money.” In my opinion, Trump has not yet begun to exert his influence; I believe he will piece together his policy “puzzle” before the middle of 2026, significantly stimulating the U.S. economy.

The key is: how the market perceives the “forward pricing” of this round of money printing. If I judge that the market's expectations for the scale of money printing that Trump can deploy have become overly crazy, I will appropriately reduce my position. Therefore, I do not have specific price targets; I am more focused on a sense of whether expectations are too high or too low. I am currently writing an article on the theme of “The Euro Collapse Triggered by France's Default.” There are other events in the global market that may continue to reinforce this logic of “must print money.” At the same time, we are in a transition from a unipolar to a multipolar world order; politicians tend to print money for appeasement under “changing circumstances.” Considering these factors, I hold a fairly optimistic judgment on the scale of money printing before the end of this decade.

Next, we need to look at: the expectations of the crypto ecosystem and macro funds for this main line. I believe the market generally underestimates the upside potential of risk assets such as equities and crypto. Governments around the world are in great need of printing money — yes, the end of the cycle may lead to a kind of “apocalyptic liquidation,” but I don't think we are at that stage yet. Governments have just rediscovered the impulse to “print money”: buying military-industrial goods, providing welfare to the public, and so on.

China is combating deflation with piecemeal stimulus; I believe it will eventually join this action. Japan, Europe, and the United States have all had to do this, and it's likely to happen simultaneously. Meanwhile, AI and robotics will bring deflationary shocks, and if employment comes under pressure while debts still need to be repaid, traditional fractional reserve banking systems may be “pushed to the wall,” ultimately having to turn to higher reserves and continue printing money to maintain the stability of the banking system—because the state will not allow systemic bankruptcy.

We are faced with a major social choice. Historical experience shows that the government's first choice is often to print money. Therefore, I believe we are only in the “first game” of this huge transformation — about how we reorganize the global economic society. Thus, I do not agree with the “four-year cycle”. Beneath this layer of macro overlay, I believe the market has the ability to push Bitcoin all the way up to the range of $150,000, $170,000, and even $200,000 — this is my judgment from now until the end of this decade.