Bitcoin wins no matter what the Fed does: Arthur Hayes

Bitcoin wins no matter what the Fed does: Arthur Hayes

Will the Federal Reserve stop lifting the interest next month? The answer may not be really important for Bitcoin investors.

According to Bitmex co-founder Arthur Hayes, the price and inflation of Bitcoin will increase at the same time because of the restrictive central bank policy-in contrast to what modern money theory suggests.

How rising interest rates increase inflation

On a Thursday Blog entry With the title "Patience is beautiful", Hayes explained why the constantly increasing debt rate of the economy will lead to traditional economy "laws". This includes the idea that rising interest rates lead to the money supply and inflation fall. He writes:

"No matter which way the Fed chooses, be it an interest rate increase or interest rate, it will accelerate inflation and trigger a general rush to the exit from the parasitic Fiat money finance system."

Data from US debt clock shows that the government of the United States currently has debt of $ 31.8 trillion. This is far from GDP's GDP of $ 26.4 trillion and its relatively poor annual tax revenue of $ 4.6 trillion.

President Joe Biden and the spokesman for the House of Representatives, Kevin McCarthy, recently presented a draft law to take office debt crisis after the country reached its debt limit of $ 31.4 trillion in January. The agreement would completely suspend the debt limit by 2025, but requires a number of cost reduction measures to ensure that it does not get out of control until then.

Hayes predicted that the debt limit will actually be raised at some point this summer, whereupon the US Ministry of Finance "has to spend debts worth dollar". This would drive the interest rates for short -term government debts up and cause banking in the bank to lift their stocks in a manner because they have an incentive to grant loans to the state and not to the bank.

Therefore the Federal Reserve will be forced to reduce interest rates, which makes the banks profitable again, but the inflation will skyrocket. Alternatively, the FED could further increase interest rates - however, this would only lead to further bank insolvencies that are compensated for by the Federal Deposit Insurance Corporation by more money prints.

"Gold, Bitcoin, AI Technology shares, etc. will be all beneficiaries of this" wealth ", which is printed by the government and paid out as interest," said Hayes.

they remain patient, says Hayes

In the short term, Hayes assumes that Bitcoin will keep stable-however, a bull market is expected to begin at the end of the third/beginning of the fourth quarter of the year.

"Money prints, control of the interest structure curve, bank bankruptcies, etc. will occur," he wrote. "Relax every now and then ..." Because if you come this autumn, you should be better to sit in your commercial space and be ready for lifting. "

last month, hayes called He does not assume that Bitcoin will reach a new all-time high ($ 70,000), but that 2024 "a good year" is.

His opinion reflects that of the on-chain market analysis company Cryptoquant, which announced cryptopotato in April that institutional investors do this Bitcoin For later this year. They said that a new all -time high could be reached by the second quarter of 2024.

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