How to Prepare for the 2025 Bull Market | Arthur Hayes
Nov 11, 2024
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Arthur Hayes, co-founder of BitMEX and CIO of the Maelstrom Fund, dives into the financial landscape, discussing what he's buying for 2025. He believes the U.S. election won’t affect money printing, which he predicts will surpass COVID stimulus. The conversation touches on the looming Chinese property bubble and the Fed's impact on the economy. Hayes also shares insights into his crypto portfolio and the evolving role of Ethereum as a potential monetary asset, setting the stage for the upcoming bull market.
The outcome of elections in the U.S. will not impact cryptocurrency markets as central banks continue to print money regardless of political shifts.
Arthur Hayes forecasts that the impending Chinese property bubble will lead to unprecedented liquidity injections, surpassing previous COVID-19 stimulus efforts.
Market indicators suggest a bullish trend in cryptocurrencies, driven by consistent institutional demand, rather than solely historical cycles.
Deep dives
Election Outcome Irrelevance
The speaker emphasizes that the outcome of elections, particularly in the context of the U.S., is largely irrelevant to the overarching dynamics influencing the economy and cryptocurrency markets. They argue that regardless of whether Trump or Harris were to win, the fundamental regulatory environment and macroeconomic situation remain unchanged. The underlying belief is that the achievements of Bitcoin and Ethereum are not primarily driven by regulatory capture, but by their technological advancements and market demand. This perspective suggests that political outcomes do not significantly affect the trajectory of these digital assets.
The Chinese Property Bubble and Future Liquidity
The discussion delves into the Chinese property bubble, described as the largest in human history, with acute focus on its ramifications for global liquidity. The speaker forecasts a massive injection of liquidity to address the fallout from this bubble, predicting that it will be greater than the COVID-19 stimulus packages. They note the interconnectedness of various global economies, emphasizing that the repercussions of China's financial maneuvers will ripple through international markets, particularly impacting stable assets like Bitcoin. Thus, significant monetary easing in China is expected to result in increased demand for cryptocurrencies.
Crypto Market Cycles and Institutional Demand
The speaker addresses current confusion within the crypto space about whether the market is in a bull or bear cycle, suggesting that market indicators have demonstrated a bull market trend over recent months. They highlight that the demand from institutional investors has remained consistent, even if retail participation hasn't reached past rally levels. The conversation underlines the importance of understanding liquidity cycles rather than merely focusing on historical four-year cycles, suggesting that factors influencing market dynamics can shift drastically based on macroeconomic changes. As such, this ongoing demand indicates a potentially positive outlook for cryptocurrencies moving forward.
Liquidity as a Key Driver
The narrative shifts to liquidity as a critical factor dictating the performance of cryptocurrencies, positing that Bitcoin's price trajectory is closely tied to the expansion of fiat liquidity in the global economy. The speaker discusses how central bank policies in the U.S. and China influence liquidity flow into crypto markets. This infusion of capital is seen as a necessary precondition for sustained bullish momentum in assets like Bitcoin and Ethereum. In essence, attention to liquidity trends becomes paramount for investors looking to navigate the evolving crypto landscape.
Cost of War and Its Impact on Assets
The speaker discusses the inflationary nature of war and its implications for asset prices, particularly in the context of Bitcoin and gold. They argue that as energy prices surge during conflicts, cryptocurrencies serve as alternative stores of value. The discussion recognizes that volatility is inherent in these times of crisis, recommending a cautious approach to leveraging positions in anticipation of geopolitical turmoil. Ultimately, the sentiment is that holding assets like Bitcoin during wartime can preserve purchasing power over the long term.
Long-Term View on Gold and Inflation Hedging
The conversation highlights the enduring value of gold as a hedge against inflation, emphasizing the central banks' preference for gold during periods of monetary uncertainty. The speaker forecasts a significant rise in gold prices driven by increasing demand from central banks, suggesting that a robust gold market could effectively reflect the realities of global inflation. They argue that while Bitcoin may present opportunities, gold's stability and historical precedent make it a compelling asset in volatile economic cycles. This long-term perspective encourages investors to consider gold as an essential component of a well-rounded portfolio.
We recorded this on the U.S election day so we don’t know who won at the time of recording. Regardless, Arthur says the election doesn’t matter. To him, the outcome is the same no matter who’s in power, they will print money.
We talk about the Chinese property bubble and the coming money cannon which Arthur thinks will be bigger than the COVID stimulus. The Fed’s next move, why the treasury is sucking all the oxygen out of the room. We get into his crypto portfolio, what he’s holding and why.
0:00 Intro 5:11 Does the Election Matter? 13:44 Where are we in the Crypto Cycle? 17:23 Chinese Property Bubble 33:14 Isn’t Bitcoin Illegal in China? 37:45 Fed’s Next Move 45:16 Politics & The Money Printer 49:42 Arthur’s Crypto Portfolio 50:33 ETH as Money? 1:01:42 Is ETH Dead? 1:02:20 Ethena 1:03:46 Memecoins 1:05:42 AI x Crypto 1:09:10 War Scenario 1:18:48 Arthur’s Advice 1:20:28 Closing & Disclaimers
