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Arthur Hayes Full Speech in Korea: War, Debt, and Bitcoin—Opportunities Amid the Money Printing Frenzy

Arthur Hayes Full Speech in Korea: War, Debt, and Bitcoin—Opportunities Amid the Money Printing Frenzy

ChainFeedsChainFeeds2025/10/01 03:12
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By:Arthur Hayes

Chainfeeds Guide:

Arthur Hayes attended the KBW 2025 Summit in Korea and delivered a keynote speech. His keynote outlined the potential phenomenon of "crazy money printing" that may occur in the United States in the future, analyzing its historical roots, political drivers, and possible specific mechanisms for realization. He also discussed why, as crypto investors, we should care about these issues.

Source:

Author:

Arthur Hayes

Opinion:

Arthur Hayes: There are a lot of mathematical issues regarding the money market here. I know this is a bit like a map of the money market, and you can look at the situation in Japan. But guys, this is what we're here for. So, with the imminent implementation of yield curve control in the United States, how high can the price of bitcoin go? That number, you know, is obviously absurd—$3.4 million. As I stand before you today, do I believe we will see $3.4 million per bitcoin by 2028? I would probably say no. But what interests me is the direction it is heading and the potential scale it could reach. So I hope we can reach one million, and others hope so too, which is great, but I am very skeptical about it. This is not just an adaptive number based on a dimension of thinking, but based on the amount of Treasury bonds to be issued. What will the situation be like when Trump and his team leave office at the end of 2028? I checked my Bloomberg terminal and studied how many Treasuries would mature in order for these people to lower interest rates, then I added the estimated $2 trillion federal deficit from now to 2028. This is roughly the Congressional Budget Office's estimate of the fiscal deficit. This gives us a number: $15.3 trillion in new Treasuries must be issued in the next three years. The second part is "fake" credit creation. How many loans will be issued to small and medium-sized enterprises across the United States? This is a very difficult number to predict. It is not easy to estimate the growth of bank credit. A more prudent approach is to use data from the COVID-19 period as a reference. During the pandemic, Trump launched the so-called QE 4 Poor People. According to the Federal Reserve's weekly data, other deposits and liabilities in bank accounts rose sharply, and corresponding bank credit increased by $2.523 trillion during that period. If we estimate that Trump still has about three years to continue stimulating the market, that would be equivalent to an additional $7.569 trillion in new bank loans. Adding this up, the credit increase from the Federal Reserve plus commercial banks totals $15.229 trillion. The greatest uncertainty in this model is the assumption of how much bitcoin will rise for every $1 of new credit. I still use the COVID period as a reference: at that time, the slope of bitcoin's percentage increase relative to every $1 of credit growth was about 0.19. You multiply this slope by the $15.229 trillion credit growth, then multiply by bitcoin's benchmark price of $115,000. That's how we arrive at the conclusion that bitcoin could reach about $3.4 million by 2028. I am almost 100% sure this will not happen. But I think this is a mental framework for understanding the credit creation that flows from the Federal Reserve to the Treasury, and then from the banking system to fund America's reindustrialization. We know what happened during the COVID-19 pandemic when this policy was pursued for just one year. What if it lasts for three years? When the Federal Reserve and the Treasury work together, print money, and in their words, send the U.S. economy to "Valhalla" (the mythical hall of the slain), we will see bitcoin prices exceed one million dollars.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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