Arthur Hayes Says USD Could Crash Under Trump, Bitcoin To Reach $1 Million!

The Former BitMEX CEO Arthur Hayes in his latest ‘Black or White’ Post has expressed how Trump’s incoming economic policies could likely trigger USD Depreciation. He has expressed his view on how politics and financial markets interact in his article. 

Notably, he foresees an impending crash of the United States dollar under Trump. While this could be bad for the dollar, it could boost Bitcoin. Hayes notes that the coin may soar as high as $1 million amidst the dollar’s depreciation.

Credit Expansion Could Boost BTC Price

The US has grappled with a growing debt-to-GDP ratio for decades. In 2008, it took $4 trillion in credit to reduce this ratio from 132% to 115%.

According to the former BitMEX CEO, cutting the ratio to 70%, where it stood in 2008, could demand $10.5 trillion in new credit. This massive credit expansion could spark major changes in asset prices, especially for Bitcoin.

Hayes claims that the upward trend after Trump’s victory is for good reason, citing Trump’s quantitative easing (QE) policies. QE refers to a monetary policy in which a central bank buys a set amount of government bonds to stimulate the economy by increasing available cash. When central banks inject liquidity, it often drives investors to pursue higher returns in alternative assets, which can lead to a rise in Bitcoin’s price.

Bitcoin, with its fixed supply, stands in stark contrast to fiat currencies, which also makes it a popular hedge against inflation. Hayes believes that with every dollar the US injects into the economy, Bitcoin becomes an even more attractive option.

He noted that with fewer coins available, even small increases in demand can push prices up significantly. As more fiat money enters the economy, the demand for assets with fixed supplies grows. 

Hayes Cites China’s Economic Model To Accelerate US Growth

This debt-driven model reflects the elements of China’s approach to economic growth. For years, China has embraced a mix of state-directed capitalism with heavy government intervention. Hayes called this approach in the US as “American Capitalism with Chinese Characteristics.” By following a similar model, the US could use debt-funded spending as a permanent economic tool.

Hayes urges the incoming 47th president to borrow a leave from China’s economic development model, which he believes will help increase the money supply and accelerate the economic growth in the United States. 

This strategy creates an ongoing cycle. More debt means more inflation, which drives more demand for assets like Bitcoin. Arthur Hayes believes that this loop could take Bitcoin’s price upward, possibly to $1 million per coin.

 “As the circulating supply of Bitcoin decreases, a large amount of fiat currency worldwide will compete to seek safe-haven assets, not just from the U.S., but also from investors in China, Japan, and Western Europe. Buy and hold long-term,” he noted. 

Bitcoin Close To 90K

Bitcoin surged to nearly $90,000 over the last 24 hours, driven by optimism about Donald Trump’s election win leading to crypto-friendly US government policies. It also surassed silver to become the 8th largest asset in the world as its $1.752 trillion market capitalization crossed silver’s $1.726 trillion. It also went ahead of companies like Meta ($1.472 trillion), Tesla ($1.123 trillion), and Berkshire Hathaway ($1.007 trillion).

While Bitcoin has been the highlight, several altcoins are also exhibiting remarkable growth, achieving up to 3x gains over the past week.