BitMEX co-founder Arthur Hayes thinks upcoming fiat currency debasement will drive up the prices of Bitcoin (BTC) and stocks.
In a new analysis, the crypto veteran says he’s confident the economy is in a new inflationary cycle and BTC will “regain its mojo.”
Hayes cites projections from the Congressional Budget Office (CBO), which estimated that the US federal budget deficit in the 2024 fiscal year will be $1.9 trillion, the highest amount ever outside of the COVID-19 years.
Explains Hayes,
“There ain’t going to be a recession. That doesn’t mean a large swath of plebes won’t be in dire financial straits, but Pax Americana will chug along regardless.
I’m pointing this out because I believe fiscal and monetary conditions are loose and will continue to be loose, and therefore, hodl’ing crypto is the best way to preserve wealth. I am confident that today will rhyme with the 1930s to 1970s, and that means, given I can still freely move from fiat to crypto, I should do so because debasement through the expansion and centralization of credit allocation through the banking system is coming.”
The BitMEX co-founder also thinks companies will pump their own stocks using cheap credit.
“Central bankers created bank reserves by buying bonds, which lowered the cost and increased the amount of credit. In private capital markets, credit was allocated to maximize shareholder returns. The easiest way to juice the stock price is to reduce the float by engaging in buybacks. Companies that can access cheap credit, borrow money, and buy back their stock.”
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