Former BitMEX CEO Arthur Hayes predicts that driven by the $10 trillion stablecoin adoption and the U.S. strategy to seize $34 trillion in global deposits, Hyperliquid's HYPE token could skyrocket 126 times by 2028.
Former BitMEX CEO Arthur Hayes made his boldest cryptocurrency prediction yet, forecasting that as stablecoin adoption hits $10 trillion and transforms decentralized trading, Hyperliquid's HYPE token could soar 126 times from current levels by 2028.
Hayes believes that Treasury Secretary Scott Bessent's policies could create the largest DeFi bull market in history.
The 'Buffalo Act' strategic goal of Bessent is to seize $34 trillion in global deposits.
Hayes's argument centers on his belief that the Trump administration will weaponize stablecoins to capture $34 trillion in Eurodollar deposits and holdings of banks in the Global South, forcing these funds into U.S. Treasury securities through compliant stablecoin issuers.
The former cryptocurrency executive believes this represents a 'once-in-a-century change in the global monetary architecture' that will enhance decentralized finance applications.
This prediction comes as Hayes maintains large positions in Ethena (ENA) (also known as Ether.fi (ETHFI)) and Hyperliquid (HYPE) through his investment fund Maelstrom.
His analysis predicts that by 2028, ENA could achieve a 51-fold return, while ETHFI could realize a 34-fold return, driven by the mass adoption of stablecoins pushing the use of DeFi.
Hayes nicknamed Treasury Secretary Scott Bessent the 'Buffalo Act' because he expects the dismantling of the Eurodollar banking system and likens this strategy to controlling foreign non-dollar deposits.
Analysis indicates that Meta's WhatsApp and other U.S. tech platforms will serve as distribution channels for dollar-pegged stablecoins, reaching billions of users globally and bypassing local banking systems and regulatory restrictions.
The stablecoin infrastructure will absorb $34 trillion in global deposits.
Hayes outlined how Bessent could shift $10-13 trillion in Eurodollar deposits by threatening to withdraw the Federal Reserve's support for foreign banks during the next financial crisis.
This policy shift will force Eurodollar depositors to comply with regulations from stablecoin issuers like Tether, which invest primarily in U.S. bank deposits and Treasury securities.
The strategy extends to capturing $21 trillion in retail deposits from the Global South through U.S. social media platforms equipped with crypto wallets.
Hayes envisions WhatsApp offering seamless stablecoin payment features for users in countries like the Philippines, effectively creating digital dollar bank accounts worth billions while bypassing local banking regulations.
Central banks in emerging markets will lose monetary control as citizens adopt stablecoins pegged to the dollar for everyday transactions.
Hayes argues that local governments lack effective responses, other than shutting down the internet, and the Trump administration may impose sanctions on officials resisting the spread of stablecoins by threatening their offshore wealth holdings.
Mandated adoption will create price-insensitive demand for Treasury securities, allowing Bessent to offer yields below the federal funds rate while maintaining the profitability of stablecoin issuers.
Regardless of the Federal Reserve's policy decisions, this mechanism allows the Treasury to control short-term interest rates.
European deposits face similar pressures as predicted by Hayes, as the German-first and French-first policies fracture the currency union, leading to the euro's collapse. Adding $16.74 trillion in European bank deposits to the target market will create a total potential market of $34 trillion for stablecoin conversions.
JPMorgan's research confirms the acceleration of de-dollarization trends, with central bank dollar reserves hitting a twenty-year low, while gold purchases by emerging market institutions surge.
The foreign ownership percentage of the U.S. Treasury market has also declined from over 50% during the 2008 financial crisis to the current 30%, creating financing pressures that stablecoins can alleviate.
DeFi protocols are positioned for explosive growth in institutional liquidity.
Hyperliquid is the game that Hayes has the highest confidence in, with a potential return of 126 times, based on his prediction that decentralized exchanges will become the largest trading venues for any type of cryptocurrency by 2028.
The platform currently holds 67% of the DEX market share and is rapidly competing with centralized rivals like Binance.
Hayes models Hyperliquid such that as the supply of stablecoins reaches $10 trillion, daily trading volume will match Binance's current $73 billion.
The exchange positions itself as the 'decentralized Binance' of the stablecoin era through permissionless infrastructure provided by HIP-3, enabling any application to integrate liquidity derivatives markets.
Ethena's USDe stablecoin offers yields above treasury rates through cash arbitrage trading strategies pioneered by Hayes at BitMEX, targeting the lending market.
The protocol has grown to become the third largest stablecoin, with deposits reaching $13.5 billion, capturing 25% of the market share, second only to Tether.
Similarly, Hayes compares the consumption infrastructure provided by the stablecoin debit card supported by Ether.Fi Cash, whose revenue model is akin to JPMorgan's 1.78% fee-to-deposit ratio.
He expects that this adoption will allow users in the Global South to use digital dollars anywhere Visa is accepted, yielding substantial returns.
The stablecoin infrastructure is already changing traditional finance, with monthly settlement volumes expected to reach $1.39 trillion in the first half of 2025.
