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Quick analysis of the situation
If there’s one thing Arthur Hayes, co-founder of BitMEX, loves more than crypto, it’s tossing around big numbers like confetti at a New Year’s bash. His latest brainchild, “Time Signature,” serves up a tantalizing macro thesis that screams potential profits—or at least a wild ride that those with iron stomachs might enjoy. Buckle up, because Hayes is suggesting we might be on the brink of the largest crypto bubble to date, fueled by what he describes as a wartime-style U.S. credit boom.
Now, when Hayes likens financial markets to dancers moving to the “kick drum” of credit creation, you might picture a room full of bankers doing the cha-cha while calculating risk. But he’s got a point: if we’re out of sync with this beat, we’re likely to see our hard-earned dollars doing a disappearing act. And what’s the beat we’re dancing to today? According to Hayes, it’s the rhythm of U.S. industrial policy—what he cheekily refers to as a flirtation with economic “fascism.” Not the lightest of dance floors, to be sure.
At the core of his assertion is the Pentagon’s recent partnership with MP Materials. Imagine Uncle Sam bursting in like a dance instructor, ready to take the lead by becoming the largest shareholder in a rare-earth elements mining operation. It’s an all-you-can-eat buffet of financial backing, including a floor price for those precious elements that’s double what China charges, plus a snazzy billion-dollar bank loan to boot. Hayes calls this a prototype of “QE 4 Poor People”—a mechanism for pumping money into the economy without those pesky Congressional approvals.
Picture this: a single loan to MP Materials can generate “$1,000 of new fiat wampum.” That’s not Monopoly money; it’s the spark that ignites new wages, deposits, and more. Hayes lays it out like a grand financial domino effect, predicting that this leads to inflation and—surprise!—“government-guaranteed profits” for banks and industry. If there’s one thing we know for sure, it’s that inflation loves to crash parties, but it seems banks are somehow always on the guest list.
Why should you care about all this? Because, my friends, Hayes posits that the next blow-up could very well center on digital assets. Think of China’s explosive property boom in the last few decades—now, fast forward that into the virtual realm. Crypto is the new golden goose, with two key policy shifts paving the way. First, a recent executive order now lets retirement plans tap into that luscious $8.7 trillion pot of crypto gold. Second, imagine a world where the capital-gains tax on digital assets vanishes like a magician’s rabbit. Hayes dubs this potential scenario “insane war-driven credit growth with no taxes.” Who wouldn’t want a slice of that pie?
But wait—there’s more! In a market already staggering under the weight of a hefty federal deficit, Hayes poses an enticing solution: stablecoins. By cozying up to U.S. Treasury bills, stablecoins are set to provide a stable seat at the table, drawing billions in new capital as crypto markets swell. According to Hayes’ crystal ball, if Trump plays his cards right, we could see the crypto market cap ballooning to $100 trillion by 2028, with a delightful $9 trillion finding its way into T-bills.
Does this suggest an old-timey cycle reminiscent of World War II financing? You bet! A lovely little self-reinforcing loop is taking shape: wartime contracts spur credit, which lifts crypto values, and voila! A happier stablecoin market keeps the whole affair afloat.
Against this backdrop, Hayes throws down the gauntlet, declaring his investment vehicle, Maelstrom, “fully invested.” In plain speak, that means he’s all in, riding the waves of the crypto storm. Hayes sees big things ahead for Bitcoin (predicting a staggering $250,000 by year-end 2025), and for Ether, well, he thinks it might just reach $10,000. As he puts it, the “Western credit geyser is about to tear the market a new asshole.”
As of now, Bitcoin is trading at a cool $118,368, but if Hayes is right, you might want to lace up your investing shoes. Just remember, these views are all his—so, like a dance partner you’re unsure of, proceed with caution and a spirited attitude. The financial floor is set, and the rhythm is about to change; let’s see who can keep up!
Disclaimer: Our articles are NOT financial advice, and we are not financial advisors. Your investments are your own responsibility. Please do your own research and seek advice from a licensed financial advisor beforehand if needed.
Image(s) are provided by Unsplash and/or other free sources. They are illustrative and may not represent the content truly.
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Please, behave!