Bitcoin Predicted to Hit $1 Million by 2026, Says Arthur Hayes Amid Anticipated Financial Crisis
Summary:
Arthur Hayes, during an appearance on Impact Theory with Tom Bilyeu, predicted that Bitcoin (BTC) price could reach between $750,000 and $1 million by 2026. He anticipates a potent financial crisis at the decade's end but expects a high-performing bull market across various sectors before it hits. He also pointed out the structural problems in the US economy caused by the government's intervention in financial crises. Hayes emphasized the importance of mounting debt and uncontrollable inflation, arguing that they can only be mitigated by money printing, consequently leading to high inflation rates. Despite his seemingly bleak global economic outlook, Hayes remains optimistic about Bitcoin's future performance.
In a recent appearance on Impact Theory with Tom Bilyeu, Arthur Hayes,the controversial but influential figure, shared his perspective on why he believes the price of Bitcoin (BTC) could rocket to between $750,000 and $1 million by the year 2026. He emphasized his expectation of a severe financial crisis, potentially more disastrous than the Great Depression, likely to strike near the end of the decade. However, he adds that before this crisis, he anticipates an unprecedented bull market affecting various sectors, including stocks, real estate, crypto, art, and others - a scale unseen since the end of World War 2.
Hayes further points to the predictable reaction of the US Government, swooping in during every financial crisis with bailouts, as a central propellor of the US economy's structural issues. This intervention, Hayes argues, fosters an ongoing cycle of central bank printing, causing inflation and stalling the economy from experiencing organic market fluctuations of periods of growth and correction. This interventionist approach by the government leads to a disruption of the free market every time a financial crisis occurs.
Hayes outlines several factors that he thinks will drive Bitcoin’s breakthrough into six-figure territory. Key among them are escalating national debt and runaway inflation. Hayes argues that the growing government debt, coupled with a large rollover requirement and diminishing productivity, can only be mitigated through money printing. This decision, while it may fuel bull markets, usually results in soaring inflation.
Hayes points towards a turning point in 2026 - a “massive top,” before a severe collapse akin to the Great Depression occurs near the close of the decade. On contributors to impending inflation, Hayes focuses on the $7.75 trillion of US debt that needs to be rolled over by 2026 and the yield curve inversion in US bonds. Hayes expresses concern that formerly major buyers of US debt, like China and Japan, no longer hold that role, which he believes will only compound the situation in the US.
Hayes asserts that the US banking system is basically insolvent, given that regulatory rules have been structured in such a way that it's profitable from an accounting standpoint - but not an economic one. Banks have massively bought into low yielding treasuries using nearly unlimited leverage - and a minor difference between the purchase and selling price leads to sizeable profits and bonuses. This practice has led to a regional banking crisis since 2021 due to falling treasury prices.
The major problem, according to Hayes, is that at a foundational level, the US banking system is incapable of acquiring more debt because of its fiscal insolvency. The Federal Reserve has committed to quantitative tightening, therefore it's not accumulating more treasuries. As a consequence, even amidst high rates on treasuries, gold prices remain high and potential buyers of treasuries have lost interest.
Banks are currently having a tough time attracting deposits and aligning their deposit rates to current market rates, creating financial pressure and issues in debt management, which could elevate to a critical level threatening the banking system.
Hayes is of the opinion that under such circumstances, a specific segment of investors will start exploring alternative investments including Bitcoin. But despite his rather grim outlook on the global and U.S economies, Hayes is optimistic that Bitcoin will still thrive and estimates its price to range between $750,000 and $1 million by the close of 2026.
According to Hayes, the entry into market action in the coming years will be influenced directly by either a financial crisis pushing rates towards 0% or government rate hikes lagging behind government spending, driving people to seek better returns elsewhere. The potential approval of a Bitcoin ETF in major markets such as the US, Europe and possibly Hong Kong, coupled with the halving event, could propel Bitcoin to all-time highs of $70,000 around mid-2024.
Hayes believes that reaching this all-time high toward the end of 2024 is when the real exciting market action will commence, with Bitcoin hitting between “$750,000 to $1 million on the upside.” When asked if these estimated price heights would hold, Hayes conceded to the possibility of a 70% to 90% drop in BTC price similar to those seen following each bull market.
Published At
10/10/2023 8:18:35 PM
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