- Arthur Hayes is bullish on Bitcoin.
- Crypto liquidity is tied to government debt.
- Analysts say Bitcoin is maturing as a macro hedge.
Crypto trading is like dancing, and credit expansion is the rhythm that drives the beat.
That’s according to Arthur Hayes, chief investment officer at Maelstrom, who said geopolitical noise won’t stop crypto’s pump. Instead, monetary expansion — as in central banks printing more money — will continue to drive Bitcoin’s price growth thanks to its capped total supply, he argued.
“Bitcoin is the best horse to ride if you believe there will be more units of fiat created in the future,” Hayes wrote in a blog post on Wednesday.
And Hayes said his fund is all-in on the credit expansion-driven cycle and predicts that Bitcoin will reach $250,000 by the end of the year. That’s more than a 100% increase based on the current Bitcoin price.
‘Macro hedge’
Other market analysts also have similar expectations for Bitcoin.
Roshan Roberts, CEO of OKX US, a crypto exchange, previously told DL News that institutional investors are treating Bitcoin as a “macro hedge.”
And the likes of Bitwise, Bernstein, and Standard Chartered have predicted that Bitcoin could reach at least $200,000 before 2026.
But Bitcoin won’t be the only high performer, according to Hayes. He says the crypto market’s plumbing has changed thanks to stablecoins.
Hayes argument? That stablecoin issuers have become de facto funders of America’s deficit budget by buying US Treasuries, which means the crypto market’s liquidity is deeply tied to government debt markets.
Tether, the biggest stablecoin issuer, holds $120 billion in US Treasury bills, per its most recent quarterly attestation.
And Ethereum is the prime stablecoin blockchain.
Hayes says he is betting big on Ethereum and expects the market’s second-largest cryptocurrency to repeat Solana’s 2023 price surge and go as high as $10,000 this year.
Ethereum has been on a hot streak since the start of the second quarter and is up more than 40% in the last two months.
Last week, Mateusz Kara, CEO of Ari10, a crypto payment company, said Ethereum’s price rising to $7,000 is no longer an unrealistic target.
Crypto market movers
- Bitcoin is down 0.6% in value over the past 24 hours and is trading at $118,339.
- Ethereum is also down 1.1% in the same period to $3,658.
What we’re reading
- Senate’s new crypto bill would exempt some tokens from securities laws — DL News
- Jito Reveals Largest-Ever Upgrade to Solana Block Building — Unchained
- What everyone’s missing w/ SOL — Milk Road
- Polymarket Could Return to U.S. Market After $112M Acquisition — Unchained
- Ethena launches $360m treasury play that buys locked tokens — DL News
Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.
