Arthur Hayes Explains Why Nations Prefer Gold

Bitcoin (BTC) may be the future of money, but according to BitMEX co-founder Arthur Hayes, most nations still trust gold. However, he added that sovereign nations are not yet ready to hold Bitcoin as a reserve asset.

Hayes Blames U.S. Credit Stress For Bitcoin’s Latest Drop

In a recent discussion, Hayes said that Bitcoin and gold share similar inflation and dollar-debasement stories. He explained that the latest drop in Bitcoin was tied to a tightening in U.S. credit markets.

The Secured Overnight Financing Rate, or SOFR, has recently traded above the Federal Funds rate. That, he said, signals stress in the U.S. money markets and explains why liquidity has been drying up.

Hayes believes the Federal Reserve will soon end its quantitative tightening program as banking reserves fall and the market demands more cash. According to him, this liquidity crunch led Bitcoin to fall sharply.

He called it a “wake-up call” that the dollar is tight, not a rejection of Bitcoin’s long-term thesis. Similar optimism has been echoed by Binance founder Changpeng Zhao. Recently, Zhao predicted that Bitcoin would flip gold in market capitalization one day.

Hayes said both BTC and gold will eventually benefit from the same macro story (the weakening dollar and inflationary policy). But the timeline for national adoption differs.

Nations Trust Gold, But Bitcoin Is Gaining An Edge

Hayes pointed out that sovereign countries prefer gold because it carries less political and market risk. He said central banks understand gold’s long history as a trade and reserve medium, which stretches back thousands of years.

By contrast, BTC’s volatility makes it risky for governments that need to maintain stable import and export operations. “They could lose their jobs if Bitcoin dropped 75%,” Hayes said. “Retail people like me can buy Bitcoin. Sovereign nations buy gold.”

Yet, some analysts see a turning point ahead. Hence, they are urging investors to sell gold and buy Bitcoin. The BitMex co-founder added that the gap between the two assets will eventually narrow.

Bitcoin’s ability to be self-custodied, he noted, gives it an edge over gold held in foreign vaults. Institutional conviction also continues to rise. For instance, Strategy Inc. aimed to buy more Bitcoin by raising $715 million through preferred stock

The BitMex co-founder cited the example of Venezuela’s gold reserves seized in London, warning that physical gold can be confiscated or frozen. Bitcoin, however, can be moved instantly and stored securely without third-party control.

Hayes Links Yuan Oil Trades To BTC’s Future

Hayes also linked the global shift in trade to this broader theme. He mentioned that Saudi Arabia and China recently completed oil trades settled in Chinese Yuan, signaling a slow move away from dollar dominance.

For Hayes, this trend reinforces why both gold and BTC will remain critical in the coming years. “Gold will lead for now,” he said. “But Bitcoin will follow once the world understands its power.”