In a recent interview with Cointelegraph, Arthur Hayes, the co-founder of BitMEX and Chief Investment Officer of Maelstrom, shared his perspectives on the current financial and crypto markets, especially in light of the Federal Reserve’s recent rate cut. Hayes noted that the Fed’s half-percent rate cut could be seen as “the calm before the storm,” highlighting how the immediate market reaction included a slight rise in Bitcoin and the weakening of the yen. He pointed out that Bitcoin’s price increase following the Fed’s announcement was accompanied by an unexpected rise in the U.S. 10-year Treasury yield, something that Hayes found intriguing and at odds with market expectations.
Hayes explained that while some may have anticipated the Fed’s rate cut to further drive down yields, the opposite occurred, signaling to him that it’s too early to gauge the full impact. Hayes maintained that the Federal Reserve is likely pushing to boost financial markets, potentially to support Kamala Harris in the upcoming U.S. election. According to Hayes, such actions aim to create a wealth effect to sway voters at the polls.
On the topic of currency dynamics, Hayes asserted that the market is currently misaligned, particularly with respect to the yen carry trade. He explained that while the U.S. continues to cut rates, the Bank of Japan has indicated a path of rate hikes, which should lead investors to exit yen-based carry trades. He predicted that “slowly, then quickly,” investors would sell foreign assets and buy back the yen, ultimately reversing this trade in a significant way.
When asked about Donald Trump’s stance on crypto, Hayes dismissed the idea that Trump is pro-crypto, remarking that Trump did “nothing for crypto” during his four-year presidency despite having the opportunity to set policies in motion. Hayes criticized the idea that Trump would advocate for the crypto space, suggesting that Trump was willing to take donations from the crypto community but had no real interest in fostering the industry’s growth. In contrast, he observed that the Democratic Party’s stance on crypto over the past four years has been clearer, and Hayes expressed a certain level of detachment from U.S. politics, noting that the U.S. isn’t the end-all for the crypto industry.
According to Hayes, the global crypto movement has grown beyond the need for U.S. regulatory clarity, pointing to the vibrant energy and optimism at international crypto conferences. He remarked that “if American regulators want to keep everyone out of their little pond, let them do that,” adding that the industry has already grown to a multi-trillion-dollar market without U.S. support. Hayes encouraged innovators and entrepreneurs to look globally, noting that the world is moving forward with or without the U.S.
Hayes also discussed the growing presence of Bitcoin ETFs in the market, noting that many institutional investors are using these ETFs not for long-term holding but for “basis trades,” which involve buying ETFs and selling futures contracts for arbitrage opportunities. He suggested that recent net outflows from Bitcoin ETFs likely reflect hedge funds unwinding these positions as the price of Bitcoin has stabilized over the past six months. Hayes suggested that the real impact of Bitcoin ETFs will only be felt when more long-only buying occurs from institutions genuinely interested in holding Bitcoin.
As for Bitcoin itself, Hayes reaffirmed his belief in the cryptocurrency’s role as the “hardest money ever known” and the foundational reserve asset of the entire crypto ecosystem. He emphasized that Bitcoin’s success is vital for the broader crypto landscape, stating, “If Bitcoin goes to a million dollars, altcoins are going to go to some crazy, crazy values.” Hayes stressed the importance of supporting the Bitcoin network and those developers working to maintain its code, warning that neglecting this responsibility could result in harm to the entire ecosystem.
Hayes acknowledged that the increasing demand for AI data centers presents new competition for energy resources traditionally used for Bitcoin mining, speculating that this dynamic could create interesting economic challenges for large-scale miners.
Hayes also reflected on his time at BitMEX, describing his experience running a large company as “not really my jam.” He admitted that while BitMEX had been incredibly successful, he preferred working with a small, dedicated team focused on financial markets, as he is now doing at Maelstrom. Hayes expressed great satisfaction in his current role, noting that his passion lies in trading, investing, and talking about financial markets.
Featured Image via Pixabay
