Source: Unchained

Broadcast Date: April 8, 2025

Podcast Guest: BitMEX Co-founder, Maelstrom CIO Arthur Hayes

整理: BitpushNews

Summary: In this podcast episode, Arthur Hayes discusses Trump's tariff policy, how Bitcoin will benefit from global liquidity easing, his belief that Ethereum is the most undervalued mainstream L1 that will return to historical peaks ahead of SOL, a cautious bullish outlook on SOL, and his views on USDC issuer Circle's IPO application.

The following is a summary of the interview content:

Host: What is your view on Trump's tariff policy? Who will be the winners and losers in this tariff war?

Arthur Hayes: First, I would discard moral judgments on economic policy and focus on adapting to the situation and profiting from it. The good and bad of the issue is always relative; rather than being emotional, it is better to adjust the investment portfolio.

If Trump really wants to bring the annual trade deficit of trillions of dollars to zero and prove to his supporters that his policies are effective, then the current measures are entirely reasonable.

But the flip side is: when countries like Japan earn dollars through exports, they will not convert those dollars back into their local currency to maintain its undervaluation; instead, they will purchase U.S. financial assets (mainly U.S. Treasuries and stocks). This is precisely why the U.S. market has outperformed the global market for the past 20-30 years and why U.S. Treasury yields remain flat despite a sevenfold increase in debt size over the past 30 years.

Trump is trying to break this cycle: he tells Americans, "I will bring back quality jobs (especially for those without a college degree)," but the cost is that foreign financing support for the U.S. government and stock market will weaken—because their dollar income has decreased. This is essentially a simple equation: the current account balance and the financial account balance offset each other.

As for the good and bad judgment? From the logic of Trump's policies, it makes complete sense. But the key is: his voter base mainly consists of uneducated blue-collar workers; Democratic supporters are more often wealthy individuals with higher education and financial assets. Over the past 40 years of globalization, the former has suffered due to industrial relocation, while the latter has benefited from corporate profits and rising stock markets. The two worldviews are destined to be in opposition, and Trump is fulfilling his promises to his base.

Host: You seem to avoid value judgments. As an American, do you personally agree with Trump's policy goals?

Hayes: It depends on whom you want to please. Data shows that over 50% of those earning over $100,000 voted for Harris; lower-income groups are more supportive of Trump.

A college degree is the core dividing line: those with higher education engage in knowledge work (technology/finance/law, etc.); those with lower education traditionally work in manufacturing.

The reality in the U.S. over the past 40 years is: companies moved factories abroad to lower wage costs → profit growth → stock buybacks → shareholder benefits. However, domestic manufacturing workers in the U.S. have become victims of globalization. Trump speaks for the latter, while the Democrats protect the interests of the former. There is no absolute right or wrong, only the game of different group demands.

Host: You previously predicted that the Federal Reserve would not tighten monetary policy due to tariffs; do you still maintain that judgment?

Hayes: I elaborated on the "fiscal dominance" phenomenon in my article for the BBC—the Federal Reserve is essentially a government financing tool. Former Fed Chairman Burns pointed out in his famous 1979 speech in Yugoslavia: when society believes the government should solve all problems (which inevitably accompanies fiscal expansion), the central bank's duty to combat inflation will yield to maintaining controllable government financing costs.

Powell is in the same predicament: U.S. economic data is strong (GDP is growing above trend, unemployment is at historical lows), yet he has strangely slowed QT and cut interest rates in September/December last year. The fundamental reason lies in the $36 trillion debt and its exponentially growing interest expenses. When rigid buyers of U.S. Treasuries, like Japan, see their dollar income decrease due to tariffs, the Federal Reserve must step in—Powell has recently made it clear:

He will reduce the scale of QT; consider using MBS maturity funds to purchase U.S. Treasuries; and claims the inflation impact of tariffs is "temporary" (repeating the mistakes of 2022).

This fully exposes its true position: ensuring the Treasury receives cheap financing. Trump's claim of "reducing the deficit rate from 7% to 3%" is not real tightening but rather diluting debt through nominal GDP growth—Bitcoin will rise alongside gold in this flood of fiat currency.

Host: You previously predicted Bitcoin would first break $110,000 rather than fall below $76,500; do you now revise that view?

Hayes: I maintain my original judgment; $76,500 is the low point from last March, and $110,000 is the historical high set on January 20 when Trump was inaugurated. Because global liquidity is about to surge: the Federal Reserve, ECB, and BOJ will all be forced to ease, and Bitcoin will benefit in both deflationary collapse and inflationary explosion scenarios.

Host: You mentioned Bitcoin might decouple from traditional markets; what do you think about Bitcoin's future price trend?

Arthur Hayes: I believe Bitcoin's price may rebound in the coming months. I previously predicted Bitcoin would break $110,000 and could potentially rise to $250,000. It all depends on global liquidity and the monetary policies of the Federal Reserve and other major economies.

Host: What are your thoughts on the recent events surrounding Hyperliquid?

Arthur Hayes: Clearly, I think people need to realize that much of the decentralization in many projects is just an ideal. Hyperliquid's stance on this is quite clear. While I don't know the technical details, it looks like centralized control. We have dealt with similar issues at BitMEX; high leverage and low liquidity contracts are easy to exploit. I think Hyperliquid's developers should learn from the experiences of other major exchanges (including those that replicate the BitMEX model). They may need to scrutinize their margin policies and liquidation mechanisms more carefully to avoid similar incidents in the future. Centralized behavior in seemingly decentralized projects is not new; BitMEX and other major exchanges have faced similar issues.

Secondly, most people may care more about price, speed, and fees. As long as the trading experience is good and profitable, they are less concerned about how the underlying operates. From the user's perspective, as long as they are compensated and can continue trading, they may not mind.

This indeed presents a dilemma for decentralization. Investors and traders need to weigh the risks of using decentralized platforms, including potential exploitation by bad actors and possible regulatory pressures. The platform teams also need to consider these issues, but their delineations may not always be completely consistent. This remains a topic of ongoing debate with no clear right or wrong answers.

Host: What are your thoughts on Circle's upcoming IPO?

Arthur Hayes: Honestly, I don't think Circle's IPO is worth investing in. Circle's business model relies on net interest margins, and it has many competitors in its customer base, especially Tether.

Moreover, Circle largely depends on Coinbase as a distribution channel; they rely entirely on Coinbase's distribution department to survive, as most of their net interest income goes to Coinbase, which then distributes it. So why would I buy Circle's IPO? If you want to own the leader, just buy Coinbase directly.

Host: How do you view the current investment opportunities in the crypto industry? What projects are you currently focusing on?

Arthur Hayes: Our investment strategy is to strictly control prices and not blindly follow popular projects. Many projects in the market are overvalued, especially those in the early stages, so we are currently more inclined to invest in high-quality projects that have been tested by the market and have already dropped significantly.

Host: What are your views on Ethereum and Solana? Which do you think has more potential?

Arthur Hayes: From a risk-reward perspective, I believe Ethereum has more potential.

Although Ethereum is currently seen by many as an unpopular asset, it is precisely this "hated" asset that tends to perform best during market rebounds. Solana has performed well in the recent market, but its future development faces some uncertainties.

I always adhere to the principle of contrarian investing—looking for the most despised assets in a new cycle. Currently, Ethereum is a typical example; as the most questioned mainstream L1, it has the potential to return to its nearly $5,000 historical high ahead of Solana. This market sentiment and value divergence create an excellent opportunity.

So if you ask me which to invest in, I lean towards Ethereum. Ethereum's position in the entire crypto ecosystem remains significant. Especially in terms of decentralized applications (dApps) and smart contracts, Ethereum is still the most competitive foundational chain. As long as it can address scalability issues, it still has great growth potential.

Host: Back to Bitcoin, you mentioned Bitcoin could reach $250,000; when do you think this could happen?

Arthur Hayes: It depends on global monetary policy. I believe if major global economies continue to expand the money supply, financial markets will be filled with abundant fiat liquidity. In this case, Bitcoin, as an anti-inflation asset, will welcome a new round of rise. Therefore, $250,000 is not an impossible target, especially around 2025.

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