Bitcoin on the Cusp of $1M Valuation Amid Global Inflation and War Risks, Says Crypto Expert Arthur Hayes
Summary:
Crypto expert Arthur Hayes, former CEO of BitMEX, suggests that Bitcoin could reach a $1 million valuation, based on the economic impacts of the potential escalation of wars and global inflation. As investors search beyond traditional long-term U.S Treasury bonds for financial security, assets like Bitcoin and gold may stand to gain. This narrative argues that not only anticipated events like ETF approval but also growing international tensions are contributing to the recent surge in Bitcoin’s value.
Bitcoin is at a pivotal point in the crypto world, with a potential valuation of $1 million per Bitcoin still on the table, according to well-known crypto figure, Arthur Hayes. Writing on his blog, "The Periphery", on October 24, the ex-BitMEX CEO indicated that rising Bitcoin prices may be sending out alarms about what's to come. Hayes argues that soaring global inflation during war time would likely boost the value of Bitcoin, alongside gold.
Increasing U.S. involvement in multiple wars raises the stakes for global instability, Hayes maintains. This comes at a difficult time when U.S. Federal Reserve is grappling with ongoing inflation and has temporarily suspended interest rate hikes, leaving a potential "bear steepener" threat for the economy.
According to Hayes, "The structural demands for hedging by banks and the financial requirements by the U.S. war machine mutually reinforce each other within the US Treasury market". Should the long-term U.S. Treasury bonds fail to provide investors with a safety net, the entrepreneur argues, investors would explore other options. Thus, when apprehension of war-time inflation engulfs the globe, Bitcoin and gold are bound to surge in value.
Following President Joe Biden's public address regarding the conflict in Ukraine and Israel, Bitcoin along with gold, have seen rallies as investors react to drops in long-term U.S Treasury's. According to the post by Hayes, this trend isn't just speculation about potential approval for an ETF, but rather points towards Bitcoin's response to the possibility of high global inflation during a world war.
Hayes is known for his insights into the impact of global economics in a post COVID-19 world and its inflationary era. Part of Bitcoin's ripple effects, according to Hayes, might include reaching a price tag of $1 million which has been echoed on social media platforms this week.
This trend stems from a mechanism known as yield curve control (YCC)— a phase in the economy control cycle that is starting to emerge in Japan. According to Hayes, when the yields become excessively high, the Federal Reserve may let go of any pretense that the U.S Treasury market is a free market, and control interest levels for political convenience.
Once market participants realize the direction of the market, Hayes predicts that the bullish trend for Bitcoin and cryptocurrencies will be in full swing. He recommends that it's an appropriate time to shift from short-term U.S Treasury bills to cryptocurrencies.
There have been increasing concerns over the macro backdrop this quarter due to escalating war tensions. Ray Dalio, a billionaire investor and founder of the world's largest hedge fund Bridgewater Associates, recently estimated a 50% chance for a World War 3 scenario.
Recorded in an October 12 LinkedIn post, Dalio said, "I hope that the leaders of the great powers will wisely step back from the brink, even while they must prepare to be strong enough to successfully fight and win a hot war." He emphasized the need for caution due to the high costs and elevated risks of more nations being dragged into the war. This is often how local wars expand into global conflicts.
With whispers of a possible ETF approval, October has seen Bitcoin's value increase by 27% and more than double year-to-date, according to data gathered by CoinGlass. This report is not offering investment guidance or recommendations, and every investment involves risks which should be evaluated individually by readers.
Published At
10/25/2023 8:40:00 AM
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