Arthur Hayes, the founder of BitMEX, has set an ambitious forecast, anticipating Bitcoin’s price to skyrocket between $750,000 and $1 million by 2026. His insights, shared on Impact Theory with Tom Bilyeu, provide a compelling rationale for this bullish projection.
Hayes, a controversial figure yet influential in the crypto sphere, outlined his prediction based on the anticipation of a significant financial crisis, potentially surpassing the magnitude of the Great Depression, toward the end of this decade. Preceding this crisis, he envisions the largest bull market across stocks, real estate, cryptocurrencies, art, and more, comparable to any observed since World War II.
The structural issues in the U.S. economy, according to Hayes, stem from the government’s habitual intervention and bailout responses to economic crises. This continual cycle of central bank printing, leading to inflation, prevents the economy from undergoing natural market cycles of growth and correction.
Hayes highlighted several catalysts contributing to Bitcoin’s journey into six-figure territory. Mounting government debt, substantial amounts needing to be rolled over, and diminishing productivity, in his perspective, can only be tackled through extensive money printing. While this strategy fuels bull markets, the resultant high inflation becomes an inevitable consequence.
The U.S. debt, a colossal $7.75 trillion that must be rolled over by 2026, and the yield curve inversion in U.S. bonds are identified by Hayes as significant contributors to future inflation. He emphasized the changing landscape of U.S. debt buyers, with traditional purchasers like China and Japan decreasing their involvement, potentially exacerbating the economic situation.
Hayes expressed concerns about the solvency of the U.S. banking system due to regulatory rules that incentivize buying low-yielding Treasuries. The banking crisis of 2021, triggered by the significant decrease in Treasury prices, reflects the inherent challenges in the current system.
Despite this seemingly grim outlook, Hayes maintains an optimistic view of Bitcoin’s performance. He foresees Bitcoin trading in the $25,000 to $30,000 range this year amid financial disturbances, negative real rates, and a growing inclination among investors to explore alternative assets, including crypto.
Looking into 2024, Hayes predicts either a financial crisis pushing rates toward 0% or a scenario where governments raise rates, albeit slower than their spending pace. Factors like the approval of a spot Bitcoin exchange-traded fund and the halving event could propel Bitcoin to a new all-time high of $70,000 by mid-2024. The true bull market, in Hayes’ estimation, commences toward the end of 2024, culminating in Bitcoin’s surge to the remarkable $750,000 to $1 million range.
Acknowledging historical patterns, Hayes anticipates a substantial 70% to 90% drawdown in Bitcoin’s price after reaching these highs, aligning with the typical correction seen after each bull market.