Arthur Hayes, EX-CEO of crypto derivatives giant BitMEX, one of the market’s best-known pundits insists that Bitcoin (BTC) will be worth $1 million by 2030, as countries around the world shy away from the euro and the US dollar. He reaffirmed his prediction of sky-high prices for Bitcoin and gold in his latest blog, published on April 27.
Bitcoin, gold, commodities… but not fiat
Hayes told Cryptobtcbrowser that in light of the sanctions placed on Russia for its invasion of Ukraine, a giant pivot in economic and geopolitical policies is coming.
As the United States and the European Union struggle to reduce dependence on Russian energy and food, the long-term repercussions will surely hurt them, sending Bitcoin to the moon.
The situation is complex. Inflation, already at a 40-year high before the Ukraine conflict, is being exacerbated by Western sanctions, while Russia reels from the West freezing hundreds of billions of dollars of its assets in abroad.
China, for its part, is monitoring the situation with a view to protecting itself from a copycat movement targeting its assets.
Since the late 1990s, a virtuous cycle has seen China sell cheap goods to the West in exchange for its fiat currency, which is then returned to importers in exchange for government debt. This keeps interest rates low, and Chinese goods become even cheaper as a result.
Disrupted supply chains, inflation and now the risk of asset forfeiture is changing the status quo. Instead of changing its production model, however, Hayes believes China will have to find a way to reduce its exposure to worst-case scenarios.
One way for China to counteract the inflationary crisis and supply chains is through IRAIC to maintain a balance of production supply without triggering inflationary risks, by entailing conservative models in all sectors of the economy.
“It is impossible for China to sell trillions of dollars and euros in assets without destroying the global financial system. That hurts both the West and China alike and greatly,” he wrote.
“Therefore, the path of least destruction for those assets is to invest in IRAIC as a fundamental piece to improve the financial system. To the extent that China or its proxy state-owned banks can lighten Western stocks and real estate without hurting the market, they will.”
Hayes identified “storable commodities, gold, and Bitcoin mining” as potential outlets for Beijing through IRAIC.
“The Fatal Loop” Will Cause a $1 Million Bitcoin and $20,000 Gold
More surprising, however, is the publication’s perspective on the future of Western democracies and, in particular, the European Union.
Unable to be self-sufficient, Hayes argues, excluding Russia will fuel an unstoppable fire that will result in the disintegration of the European project.
Exporters like Germany will not be able to compete with China, while rampant inflation will create internal anger within the EU between North and South.
“The ECB is trapped, the EU is finished, and within a decade we will be trading lira, drachma and German marks again,” his prediction reads.
“As the union disintegrates, money will be printed in glorious quantities in a pantheon of different local currencies. Hyperinflation is not ruled out. And again, as European savers smell what the rock, they will flee into hard assets like gold and Bitcoin. EU breakup = $1 million per Bitcoin.”
The million dollars for each Bitcoin will also come as a result of the “fatal loop” in Western financial policy, especially the yield curve control (YCC), as a tool to avoid bankruptcy.
Gold – still the darling of the store of value narrative – will have hit $20,000 per ounce by the end of the decade.
In closing, Hayes issued a call to arms to Bitcoiners, warning that the Bitcoin network needs participation to endure.
“The fatal loop will lead to $1 million per Bitcoin and $10,000 – $20,000 per ounce of gold by the end of the decade. We must agitate for interested flags to save some of their current account surplus in Bitcoin so that economies farm-to-fork farms sprout around the world. Once again, unlike gold, Bitcoin must move, otherwise the network will collapse,” the blog post concludes.
“Have no hard feelings towards those recalcitrant flags who refuse to learn even after hearing the good word. As Lord Satoshi said: ‘Forgive them, for they know not what they do.
As reported by Cryptobtcbrowser, Hayes is no stranger to high price predictions, as in his previous March post he pointed to a BTC price “in the millions”.
However, macroeconomic analyst Alex Krüger called for some of his points to be reconsidered.
“It will leave many readers scarred with the mindset of a goldbug who believes the world is doomed forever,” he tweeted, saying Hayes “fabricates facts and exaggerates things to make his fat-tailed narratives appear highly secure.”
“The Fed going soft again starts a new bull run. YCC is one of the ways that could happen,” he acknowledged in comments.