Original Author: BitMEX

Brief Overview

• Meme coins went wild this week, with top meme coins rising over 90% in just seven days. Meanwhile, Bitcoin continued its upward momentum, increasing by over 10% and reaching new highs.

• The meme coin craze this week was primarily driven by two major catalysts. Politically, the Trump administration officially announced that Elon Musk would co-lead the Department of Government Efficiency (DOGE) initiative, followed by Musk's tweets about Dogecoin and Peanut, which sparked huge interest. Additionally, major exchanges like Robinhood and Coinbase listing PEPE coin—previously hesitant to support this coin—marked a shift in the cryptocurrency landscape following Trump's victory.

• In our trading analysis section, we will explore the latest macro situation—how our own Arthur Hayes envisions the catalysts and reasons for Bitcoin reaching $1 million.

Data Overview

Quality Coins

• $PNUT (+160.9%): Elon praises Peanut for "saving the nation"

• $DOGE (+91%): Trump officially appoints Elon Musk as co-head of the "Department of Government Efficiency"

• $PEPE (+90.4%): PEPE exceeded expectations this week by being listed on Coinbase and Robinhood

Poor Quality Coins:

• $LDO (-14.7%): LDO performed well last week, but meme coins stole the spotlight.

• $AAVE (-13.6%): The same reason as LDO; although DeFi was also a major beneficiary during Trump's term, it failed to attract investment.

• $TIA (-8.5%): No one cares about "cool technology" and VC coins.

News Flash

Macro

• ETH ETF weekly net outflow: +$555 million (source)

• BTC ETF weekly net outflow: +$1.87 billion (source)

• Donald Trump appoints Elon Musk and Vivek Ramaswamy to lead the new Department of Government Efficiency (DOGE) initiative (source)

• Franklin Templeton expands $410 million money market fund to the Ethereum blockchain (source)

• Federal Reserve Chair Jerome Powell's hawkish comments dampen the cryptocurrency market (source)

• Republican state attorneys general and DeFi lobbying groups sue the SEC over cryptocurrency enforcement actions (source)

• U.S. ETFs see $4.7 billion inflow in 6 days, with Bitcoin becoming the seventh largest asset globally (source)

• Michael Saylor: Strategic Bitcoin reserves have precedents in other large U.S. government purchases (source)

• Tether issues $5 billion USDT in 5 days, adding liquidity to the bull market (source)

• Hashkey CEO states that the Trump administration could influence China to accept Bitcoin (source)

Projects

• VanEck launches SUI ETN for European investors, with token price hitting an all-time high (source)

• Tether launches a new platform to simplify asset tokenization for businesses and nations (source)

• Trump-backed World Liberty Financial selects Chainlink data services as DeFi platform takes shape (source)

• Solana supports 89% of new token launches, with the meme coin craze continuing to drive network activity (source)

• Robinhood adds support for SOL, ADA, XRP, and PEPE for U.S. investors (source)

• Binance Launchpool and pre-trading will launch Usual (USUAL) (source)

• McDonald's collaborates with Doodles to launch coffee and collectibles (source)

Trading Insights

Note: The following content does not constitute financial advice. This is a compilation of market news, and we always encourage you to conduct your own research before executing any trades. The following content does not imply any guarantee of returns, and BitMEX is not responsible for your trades not performing as expected.

Long-Term Outlook: What Drives Bitcoin to $1 Million?

In Arthur Hayes' recent article, he outlines why the U.S. is shifting towards what he calls "American capitalism with Chinese characteristics"—a mixed economic system that prioritizes the ruling elite while selectively stimulating the economy. For holders of Bitcoin and other cryptocurrencies, this could be the most favorable environment yet, allowing your net worth to soar.

Key Points:

• Expected high growth in anti-inflation assets: As fiat currencies face long-term devaluation, Bitcoin and cryptocurrencies are most favorable for prosperous development.

• Maintain a bullish stance on Bitcoin: In Hayes' view, Bitcoin is the most effective way to resist what he sees as the inevitable erosion of fiat currency.

• Focus on regulatory changes: Easing bank regulations and allowing unlimited quantitative easing could trigger inflation and further enhance Bitcoin's value as a safe haven.

Beyond Capitalism: The U.S. Moves Towards State-Controlled Growth

Hayes believes that the U.S. economy has deviated from free-market capitalism, evolving into a government-controlled system focused on maintaining elite power. Since 2008, policies have socialized losses (such as bank bailouts) while privatizing gains, resulting in extreme wealth inequality. For Bitcoin holders, this is a perfect scenario—every distortion in the fiat currency system highlights the advantages of truly decentralized assets like Bitcoin.

"Quantitative Easing for the Rich" vs. "Quantitative Easing for the People"

From 2009 to 2020, quantitative easing (QE) created a process where funds flowed to the top, driving up asset prices but providing almost no help to the average American. However, COVID-19 marked the arrival of "quantitative easing for the people." Stimulus checks and direct payments to ordinary Americans created actual spending, sparking real economic activity and giving us a glimpse of what happens when funds flow to the masses. This period also demonstrated a key point: when ordinary people have more money, inflation occurs—bad news for bonds but good news for Bitcoin.

"Reshoring" and the Rise of Strategic Industries in the U.S.

Hayes anticipates a renewed focus on the "reshoring" of key industries under Trump's leadership. The government may invest subsidies and cheap financing into U.S. manufacturing, defense, and technology sectors to create jobs and reduce reliance on foreign suppliers. What’s the conclusion? As government-supported industries thrive, cryptocurrencies like Bitcoin will continue to flourish as an "anti-fiat currency" option in the context of debt expansion and money creation.

Erosion of Fiat Currency and Bitcoin Hedging

Hayes predicts that inflation rates will rise, with the government pushing wages higher through support for unions and strategic job creation. Savings and bonds will lose their appeal due to declining real returns. For Bitcoin holders, this environment is ideal: Bitcoin, the "financial repression hedge" for millennials, becomes the best way to resist fiat currency devaluation. Hayes suggests maintaining a bullish BTC position as the government pursues aggressive fiscal policies that devalue fiat currency over time.

Potential "Unlimited Quantitative Easing" Favorable for Bitcoin

If the Federal Reserve relaxes capital rules, banks may purchase U.S. Treasury bonds in large quantities, creating almost unlimited liquidity to finance government debt. This "quantitative easing for the poor on steroids" will drive massive credit growth and stimulate inflation—both historically associated with Bitcoin appreciation. For Bitcoin holders, this means the dollar will continue to weaken, increasing the appeal of decentralized assets.

With plans to support defense, healthcare, and industry reshoring, Hayes predicts that the economy will continue to inject credit. This massive debt issuance will mimic China's state-managed economic policies, driving growth while simultaneously devaluing the dollar. As the purchasing power of fiat currency declines, Hayes believes Bitcoin could soar, potentially reaching $1 million per coin, as more investors view it as the ultimate inflation hedge.

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