Arthur Hayes, Former Ethereum Skeptic, on Why the Merge Makes Him Bullish on ETH - Ep. 393

4 snips

Sep 6, 2022

Arthur Hayes, cofounder of BitMEX and a keen commentator on crypto markets, dives into his transformative journey regarding Ethereum. He reveals why he once deemed Ethereum worthless and how the Merge has shifted his perspective, making him bullish on ETH. Discussions touch on NFTs unlocking vast cultural value, the importance of macroeconomic factors, and Ethereum's future compared to Bitcoin. Hayes shares trading strategies and thoughts on the potential impact of a US recession on crypto markets, making for an insightful exploration of digital finance.

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ANECDOTE

Arthur Hayes's Ethereum Journey

Arthur Hayes initially saw Ethereum's unfixed price and supply as worthless.
He missed the presale but later profited by recognizing Ethereum's undervaluation in 2020.

INSIGHT

Valuing Ethereum

Arthur Hayes views DeFi's Total Value Locked (TVL) as a key indicator of Ethereum's value.
He's bullish on NFTs, believing they'll unlock trillions by enabling trade in human culture.

INSIGHT

Ethereum's Inflation Rate

Ethereum's post-merge monetary policy doesn't need to be deflationary to drive price appreciation.
A significant reduction in the inflation rate alone can increase demand.

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Arthur Hayes, cofounder of BitMex, discusses how he’s trading the Merge, the impact of macroeconomic policy in the markets, his career as a writer, and much more.

Show highlights:

how crypto is reconfiguring how humans do finance over the internet
why Arthur initially thought Ethereum was worthless
how NFTs allow users to trade human culture and will unlock trillions of dollars of value
why Ethereum doesn’t even need to be deflationary
whether other layer 1s can take some market cap from Ethereum
why Arthur thinks that a successful Merge is understated and why this is a valid reason for hedging
why he thinks an Ethereum proof of work chain won’t succeed and how Arthur will trade ETHPoW
why LDO, Lido’s token, is a riskier bet but has more potential gains
how he believes the Shanghai upgrade will impact ETH’s price
whether the Merge affects BTC’s narrative as digital gold and whether the inflation hedge theory of Bitcoin still holds
why Bitcoin is a measure of USD liquidity and why the Fed rates don’t matter as much as everyone thinks
whether hedge funds and institutional investors would want to invest in crypto given the high correlation with traditional markets
what Arthur believes the impact of a potential US recession would be on the crypto markets
why he believes the real economy is not relevant to the financial markets
whether algorithmic stablecoins are doomed to fail
how the credit cycle works and how it repeats again and again
Arthur’s method for identifying good projects to invest in
how Arthur became such a good writer
whether BTC is money and the religious aspect of the Bitcoin culture

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Episode Links

Previous Coverage on Unchained:

Arthur’s posts discussed during the show:

Eth-Flexive
Ether, a double digit shitcoin
Teach me Daddy (on USD liquidity and Macroeconomics)

Macroeconomics:

Adam Cochran on the Fed’s QT
Pantera Capital’s newsletter

ETH Trade:

Whether Ethereum’s Merge is priced in
Gauntlet’s view on the Merge
BTC correlation with stocks

ETH Post-Merge Dynamics:

Cumberland on the Ethereum dynamics after the merge
Miles Suter on the implications of the Merge
The triple point asset

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