In a recent blog post titled “The Periphery,” Arthur Hayes, former CEO of BitMEX, presents a compelling argument for Bitcoin’s potential to reach a $1 million price tag. According to Hayes, Bitcoin is on the brink of a significant moment, a “trigger” that could propel its value to unprecedented heights.
The key catalyst, as outlined by Hayes, is the current global geopolitical landscape. With the United States involved in two escalating wars, there is a heightened risk of worldwide conflict. Simultaneously, the U.S. Federal Reserve grapples with persistent inflation, opting to pause interest rate hikes. This confluence of factors, Hayes argues, sets the stage for a “bear steepener” in the economy.
Hayes suggests that the interplay between the structural hedging needs of banks and the borrowing requirements of the U.S. war machine creates a scenario where long-term U.S. Treasury bonds no longer offer safety for investors. In response, capital is expected to seek alternatives, with both gold and, crucially, Bitcoin emerging as safe-haven assets. The recent 15% surge in BTC/USD, following President Joe Biden’s address on the Ukraine and Israel wars, is cited as evidence of this trend.
Hayes dismisses the idea that this rally is mere speculation, emphasizing that Bitcoin is discounting a future characterized by inflation resulting from a global world war. He draws attention to the aggressive selloff in long-end U.S. Treasuries, pointing to Bitcoin and gold rallying in response.
The former BitMEX CEO is renowned for his post-COVID-19 economic predictions and anticipates that Bitcoin’s role as a hedge against inflation will lead to a $1 million price. He references yield curve control (YCC) as a contributing factor, signaling a move toward controlled economics, similar to developments observed in Japan.
The blog post concludes by asserting that as awareness grows regarding the economic dynamics at play, a full-fledged bull market for Bitcoin and cryptocurrencies will commence. Hayes advises investors to transition from short-term U.S. Treasury bills to cryptocurrencies.
Billionaire investor Ray Dalio’s recent statement regarding a 50% chance of a “World War III” scenario adds further weight to Hayes’ argument. Bitcoin’s current upward trajectory, coupled with speculation about an exchange-traded fund approval, has seen a 27% increase in October and a remarkable 100% year-to-date surge, according to CoinGlass data.