This article is from: The Rollup

Translation | Odaily Planet Daily (@OdailyChina); Translator | Azuma (@azuma_eth)

Editor's Note: The well-known cryptocurrency-themed interview channel The Rollup has updated its latest dialogue content today. The guests for this episode are Arthur Hayes, co-founder of BitMEX, who has recently had a good track record in market predictions, and Mike Silagadze, CEO of ether.fi, who has just launched a $40 million fund. The interview covers multiple topics including market predictions, ETH/BTC price performance, BTC and gold, fundamental analysis, and more.

Below are some excerpts from this interview (focusing on Arthur Hayes' statements), translated by Odaily Planet Daily.

Q1: Has the correction ended?

Arthur Hayes: I believe the market absolutely bottomed around $74,500. At that time, the Trump team took an extreme stance on tariffs, but had to compromise under the pressure of a financial market crash — after all, the Trump team is also facing pressure from the midterm elections in 2026.

So the market has bottomed out, funds have returned, and Bitcoin has rebounded by about 25%. Do you remember the market low after the FTX crash in 2022? At that time, Yellen chose to reduce reverse repos from $250 million to zero, and then Bitcoin rose nearly sixfold. I believe we will see a similar upward pattern, which is the beginning of Bitcoin's journey to $1 million.

Q2: How long can the market's liquidity and positive sentiment last? Is the rise still related to the interest rate cut expectations driven by Trump?

Arthur Hayes: Focusing too much on interest rate cuts is somewhat misguided. People always want to apply the experiences from 2008-2019 — when quantitative easing was introduced, the Federal Reserve printed money every week, and buying assets was a guaranteed profit. This has become a conditioned reflex in the financial market, but the rules of the game have changed. When the general public realizes that quantitative easing means inflation, and inflation will affect the ruling party's election prospects, the policy toolbox must be updated. Yellen's actions at the end of 2022 are a typical example — although not nominal QE, it created liquidity in some form, driving the stock market, cryptocurrency, and gold to surge in the following 18-24 months, until Trump took office.

Now people are still waiting for Powell to cut rates or restart QE, which is completely missing the point.

Currently, the U.S. Treasury is implementing a bond repurchase program, which, although not as straightforward as QE, essentially provides leverage for Treasury bond buyers. As the government deficit expands, trillions of dollars in new debt will flood the market, which means liquidity is still being injected, just under a different guise. If you wait for traditional QE signals to enter the market, you might still be on the sidelines when Bitcoin reaches $500,000.

The real data to pay attention to is volatility, especially the bond market volatility index (MOVE). When this index breaks 140, policymakers will definitely intervene: for example, after it hit 172 on April 8, JPMorgan CEO Jamie Dimon immediately criticized Trump's tariff policy on television, and Trump quickly changed his stance; after MOVE broke 140 in September 2022, Yellen quickly adjusted the bond issuance structure, and the market rebounded in response. History has repeatedly proven that as the leverage in the financial system rises, the intervention threshold for policymakers is decreasing.

Trump, as a "volatility generator," is precisely a positive factor for Bitcoin. He often uses the strategy of "maximum pressure - testing reactions - quick pivot," and this unpredictability is exactly the nourishment that the crypto market loves. We don't need to predict policy directions; we can make money as long as volatility rises — because a highly leveraged financial system simply cannot withstand severe fluctuations.

Q3: The rise of gold is also fierce; do Bitcoin and gold share the same logic for their price increases?

Arthur Hayes: I believe gold and Bitcoin are different expressions of the same phenomenon, just with different buying groups.

Ultimately, I think you hold gold because central banks will buy gold, and you hold Bitcoin because the global retail crowd will buy Bitcoin. What they want to escape from is the same thing — excessive inflation and the potential collapse of the post-war fiat financial system.

Q4: Why does debt refinancing inject liquidity into the system?

Arthur Hayes: The key is to understand how "basis trading" works. Hedge funds arbitrage the price difference between spot bonds and futures contracts, layering on high leverage. As the Treasury relaxes capital requirements for banks, these funds can participate in Treasury auctions with higher leverage. Although the Treasury's repurchase program itself does not create liquidity, it maintains the operation of the Treasury bond market, allowing the Treasury to continue issuing bonds — against the backdrop of a 22% surge in the deficit rate (the first six months of fiscal 2024 compared to the same period last year), this mechanism essentially maintains liquidity supply through financial engineering.

Q5: Which tokens can outperform Bitcoin? Will they be those with real cash flow?

Arthur Hayes: This reminds me of Buffett's famous saying: "Price is what you pay; value is what you get."

The key to this question depends on the entry price — if you buy ether.fi at $0.55 (Note: another guest in the interview is ether.fi CEO Mike Silagadze), and assuming Mike's vision is realized, it could indeed outperform Bitcoin. However, if you buy at an inflated price, even if the project generates $1 billion in revenue, the percentage return from that starting point will be hard to compete with Bitcoin.

Any asset could potentially surpass Bitcoin, but it depends on two variables: the buying price range and the income growth curve during the holding period. There are many undervalued cash flow tokens that have explosive potential when the "altcoin season" or "fundamental season" arrives (i.e., when Bitcoin's dominance peaks).

Q6: Has Bitcoin's market share peaked?

Arthur Hayes: I don't think so.

Institutional investors and family offices are currently experiencing a cognitive awakening — Trump has shattered the illusion of "American exceptionalism," exposing the essence of this empire that prioritizes basic voters over capital security.

This group of funds will begin to understand the significance of Bitcoin's existence; they will increase their holdings in gold, reduce their holdings in Nasdaq and U.S. Treasuries, and shift to assets that are decoupled from the current system. This migration will first focus on Bitcoin rather than other tokens — the wealthy won't start by buying altcoins.

Q7: I heard that Maelstrom (Arthur Hayes' fund) is doing some mergers and acquisitions, integrating new crypto businesses?

Arthur Hayes: We are operating a small acquisition fund. There are some crypto businesses with good cash flow that have been misunderstood by traditional investors for various reasons.

We have great flexibility in capital deployment because it's all my own money, with no restrictions from investment memorandums (PPM). We are looking at several companies and may conduct a leveraged buyout of one of them to improve its business as sponsors. There are many segmented high cash flow businesses in the crypto space that may not be purely blockchain businesses but service providers that traditional private equity market investors don't favor because they are not high-growth potential companies like Coinbase. But if we assume this sector will grow, we need certain services that only crypto-native institutions can provide.

Q8: At this stage, what are your criteria for screening assets?

Arthur Hayes: First, I want to find protocols or businesses that users are genuinely paying for — not relying on token incentives, but users paying with stablecoins or other cryptocurrencies to purchase services. A typical example is exchanges; for instance, Hyperliquid is a model that has grown from zero to capture 10-20% of the perpetual contract market within 18 months. They have built an extremely efficient order book system, and the fees users pay are directly used for token buybacks; this straightforward business model makes sense.

The second key point is how token holders benefit. Many projects that are making a lot of money (like some top DEXs) do not share any profits with token holders. Take Uniswap as an example — no matter how much the protocol earns, holding UNI is useless, which is why I don't pay attention to its price at all. If a project starts by financing through token issuance but does not allow the community to share in the profits after the protocol succeeds, that is simply dishonest.

My core criteria for investing in tokens are clear: first, there must be real paying users; second, there must be a clear profit distribution mechanism — whether through buybacks, dividends, or other forms. This way, I can calculate the expected APY, conduct cash flow discount analysis, and assess whether the current valuation is reasonable. For the past month and a half, I have been patiently positioning in such projects because the market's irrational sell-off has created excellent buying opportunities — being overly sold just because "it's not Bitcoin" has instead created golden opportunities for those strong cash flow protocols.

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