Arthur Hayes Banks on Crypto Amid Global Monetary Policy Shift

• Hayes discusses the unfavorable reaction of the market to Treasury tactics.
• The co-founder argues that BTC and ETH are the crypto industry’s bedrock assets.

Co-founder of BitMEX, Arthur Hayes recently outlined the delicate balancing act that Janet Yellen, the Treasury’s top official, must do in order to maintain the nation’s fiscal health in the face of mounting government deficits. Hayes discusses Yellen’s strategic alternatives for regulating economic expansion and public expenditures, such as the use of liquidity injections and the Fed’s rate expectations manipulation.

Hayes discusses the unfavorable reaction of the market to Treasury tactics and the subsequent increase in rates on long-term U.S. debt.

Hayes suggests that other central banks will participate in similar quantitative easing measures as a result of the worldwide repercussions of U.S. monetary policy. He predicts that in reaction to the Fed’s easing, every other major central bank would follow suit and begin printing money, setting off a wave of fiscal expansion throughout the world that may alter the monetary landscape.

Infusion of Liquidity

Instead of investing in long-term bonds, Hayes suggests that people put their money somewhere more liquid and short-term. In his opinion, the current investing climate may be best grasped by looking at the RRP (Reverse Repo Program) balance. Hayes forecasts that the U.S. stock market will rise thanks to a trillion-dollar infusion of liquidity and argues for a balanced portfolio in light of these changes.

Hayes argues that Bitcoin and Ethereum are the digital currency industry’s bedrock assets since they’ve shown to be more resilient than more conventional investment vehicles in the face of central bank balance sheet expansions.

By increasing liquidity in global markets, Hayes believes cryptocurrency will improve its position. He describes a possible future in which the dollar’s liquidity increases, sales of Treasury bills soar, and investment tendencies in Bitcoin solidify.

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