Arthur Hayes, the Chief Investment Officer of Maelstrom and co-founder of BitMEX, analyzed the global macroeconomics and cryptocurrency market in-depth during an interview with Bonnie Blockchain, not only predicting a massive printing of money in the US, that most altcoins may not rise again, but also pointing out the lack of innovation in the competition among many exchanges, painting a picture of future market changes for investors.
TWD Strengthening: The Prelude to the Asian Capital Return Wave
Hayes explained the phenomenon of the Taiwanese dollar suddenly rising by 6 to 7% against the US dollar in just a few days in early May. He pointed out that the Taiwanese government has long suppressed the TWD exchange rate to maintain export competitiveness, leading to the world's possibly richest institutions, which are Taiwan's life insurance companies, investing large amounts of dollars overseas, creating a domestic liquidity surplus that in turn pushes up housing prices:
With the depreciation of the US dollar, everyone suddenly worried about what would happen if Taiwanese life insurance funds began to withdraw from the US Treasury market and converted those funds back into TWD. The result was that many hedge funds were scared and exited directly, with many stop-loss orders in the interest rate differential trades, which is why there was a strong appreciation of the TWD in the first week of May.
(The surge of the TWD may trigger a storm! The Financial Supervisory Commission closely monitors the dollar exposure of the life insurance industry.)
He also emphasized that the Taiwanese government did not strongly intervene this time, showing that the authorities are willing to cooperate with the US to avoid being labeled as a 'currency-manipulating country'. He expects this trend to gradually spread to Asian countries like South Korea and Singapore, initiating another wave of capital return.
The ultimate narrative of Bitcoin: A million-dollar target under the flood of money printing.
Facing the potential withdrawal of foreign capital from the US market, Hayes predicts that the US will be forced to print money to fill the liquidity gap, estimating that about 9 trillion USD will be released by 2028. He firmly believes that in such a massive flow of funds, Bitcoin, which has limited supply and relatively small market capitalization, will become the best-performing asset, reiterating his target:
Bitcoin will reach 250,000 USD by the end of the year and 1,000,000 USD by 2028.
He emphasized that Bitcoin will prove to be an effective tool for hedging against this liquidity flood.
Altcoin bubble burst? Can Ethereum turn the tide?
Speaking of the altcoin market, Hayes candidly stated that most altcoins 'lack' product-market fit (PMF) and have not returned profits to token holders. He described these projects as 'overvalued, low liquidity garbage VC coins', jokingly saying:
Honestly, most of the altcoins you hold probably won't rise again. These projects lack actual users and revenue, making it difficult to support their high valuations.
However, he also named a few projects that meet his requirements, such as Pendle and Ether.fi.
(Arthur Hayes: Bitcoin will reach 250,000 USD by the end of the year, Ethereum will make a comeback against Solana.)
Moreover, even though Ether has been less popular recently, Hayes believes that if one wants to bet on a shift in the market cycle, Ether still has the chance to outperform the market. He expects that once Bitcoin's dominance rises above 70%, altcoins may experience a real rebound. Maelstrom's portfolio strategy also reflects this judgment, mainly allocating to BTC, supplemented by a certain proportion of ETH.
Exchanges are numerous and lacking in innovation, and the entry of traditional finance giants becomes a challenge.
In addition, Hayes analyzed that the current centralized exchange (CEX) market is highly competitive but lacks innovation, with products and fee structures being quite similar. As traditional financial giants like JPMorgan begin to venture into cryptocurrency trading and may offer 'zero-fee' services, existing exchanges like Coinbase will face significant challenges:
If I were to rebuild BitMEX, I would abandon spot trading of Bitcoin, which is a 'loss-making product', and focus on 'highly speculative' areas such as meme coins or new coin offerings to develop high-margin revenue.
(Traditional finance integrating blockchain leaves cryptocurrency in the shadows: What has the Cypherpunk movement left after moving to the margins?)
Maelstrom's new chapter: From perpetual contracts to physical acquisition strategies.
In the final part of the interview, he recalled that the original intention behind BitMEX's invention of perpetual contracts was due to customers not understanding traditional futures' expiration dates and price differences:
Our clients do not understand futures contracts, they do not understand why prices differ from spot prices, they do not understand why there are expiration dates, which led us to think and ultimately develop an innovative product that does not expire and has high leverage.
He even stated that he would not touch perpetual contracts at all, usually only engaging in spot trading.
Looking ahead, Hayes revealed that Maelstrom is not just about investment but is also launching a new 'acquisition business', aiming to raise funds to acquire 'highly cash flow positive' and reasonably valued cryptocurrency-related companies. They plan to reorganize the management team and increase revenue sources, and may go public in the US through a Special Purpose Acquisition Company (SPAC) to expand their industry influence.
This article featuring Arthur Hayes: Altcoins probably won't rise again, and the entry of traditional finance will make exchanges lose competitiveness first appeared in Chain News ABMedia.
