Arthur Hayes explains how Bitcoin will reach $1 million

The average person will get completely Destroyed by this inflation if you want To have above average results then You're going to have to put above Average effort into thinking about your Financial future Arthur Hayes is among The most controversial figures in the Crypto space after founding beat Max the World's first crypto derivative Exchange In 2014 he became the first African-American crypto billionaire last Year Hayes pleaded guilty to Facilitating money laundering in the U.S Now he's running an investment fund that Focuses on fixing what he considers to Be the problems plaguing the crypto Industry in this interview Haze breaks Down his investment thesis on crypto Explains how Bitcoin could reach 1 Million dollar in the current cycle and Why the catalyst is likely to come from Outside the industry I'm Giovanni on This show we challenge the ideas that Shape the world of crypto in each Episode we assess a crypto narrative a Macroeconomic Outlook or a potentially Disruptive technology only the most Solid ideas will make it to the other Side [Music] So Arthur at the end of last year your Family office set up a new investment Fund called Maelstrom the goal of which Is fixing the problems that have been

Plaguing the crypto industry so what are Those problems according to you the Concrete problem in the 2022 was that we Got away from what we're actually trying To build here which are the centralized Companies well not companies protocols Projects Um obviously infrastructure to solve Financial and social and political Problems and that's hard to do Um building Bitcoin is extremely Successful but it was it took a very Long time and it was very difficult And it's still a project in flux whereas It's less difficult to build a Centralized company around an individual Who is celebrated as very good in Respective field And you have you know Sam Baker and free You have Kyle and see with your arrows Barry Silva that Genesis Um I can't pronounce his name Celsius I see all these individuals these large In Life personalities that have these Companies people like oh yes this is Crypto I believe in this guy I'm gonna Invest in their their company I'm gonna Use their products they're going to keep My money safe and at the end of the day You know too much leverage and a down Trending Market destroyed all these Businesses because they were centralized They didn't actually you know they Didn't build robust businesses that

Could withstand all parts of the cycle They took a lot of Leverage some of them Are outright frosters But at the end of the day he placed our Trust in these companies and these Individuals and that trust was misplaced And a lot of people lost a lot of money As the market turned right but the Decentralized solution still worked Bitcoin still worked ethereum still Worked you're Primitives such as Uniswell compound and Ave all worked Flawlessly and so this was while the Problem was placing trust in such as Institutions the solutions were right There before us maybe the token prices Were down 95 but that doesn't matter This the actual technology still worked We still have solutions that solve these Problems and down in this you know Protracted bear market and hopefully Exiting exiting that period were able to Invest at very very good prices in Things that actually are doing Decentralization okay that's interesting But now let's zoom out for a bit if you Had to point out at the main macro Thesis that is let's say motivating your Belief that cryptocurrencies will Eventually replace or at least offer Available alternative to the current Fiat system what that would be at a Higher level the general concept is If we believe that traditional Financial

System is you know has too much debt and Thus it must inflate away the problems And if you're left in this system your Capital is going to get destroyed over Time But the cost of energy is the cost of Energy then this portion of crypto needs To at least preserve the cost of energy And you know everybody has a different Standard of living that they'd like to Maintain that they're living costs Energy the food you like to eat places You like to travel where you like to Live all that requires a certain amount Of energy everyone has a different sort Of preference marginal utility curve Energy So my whole goal with all of my Investing and Um is to preserve Capital so that I can Consume the same amount of energy or the Whatever energy amount that I would like From now and into the future Now if you hold all your assets in the Fiat world you're almost guaranteed not To keep up the pace of anything at a Macro level there's so much debt in the World That unless we find you know a Completely new source of energy that's Like you know multi-factors times more Efficient and we deploy these new forms Of energy into the entire world in like The next two years

There is no way to pay back this debt And so The point is to find assets outside of The traditional Financial system that Are going to at least maintain Purchasing power You know in hydrocarbon terms the Average person will completely will get Completely destroyed by this inflation And if you want to be the average person Then be the average person if you want To have above average results then You're going to have to put above Average effort into thinking about your Financial future so recently you also Said that whether a decentralized Product is going to be widely adopted by The masses will depend on factors that Are outside crypto So what are these factors are you Talking about Well I think you know we just had one we Had one in you know March in the United States we had a bankrupt the second Largest bank failure in I think uh U.S Financial history was uh silicon either Silicon Valley Baker Signature Bank one Of them so people learn overnight well Certain people did the Silver Gate Depositors learned all about you know Deposit Insurance limits You know what is covered or what's not Covered You know the next two banks that failed

You know a few days later The deposits were about to learn these Lessons and then you know people were You know there's images on the internet Of people queuing at banks in the U.S And like oh what happened what's Going to happen in my deposit I thought The system was completely safe Oh now I kind of understand what some of These people were talking about about You know diversifying my finances and Where I should actually care about the Institution about where I put my money And understand their business model and What they're actually doing But no you know the US government in its Own interest decided that okay we let That One Bank fail Let's cover these two banks in terms of Um you know depositors and you know Guaranteed all the deposits right They're not really going to learn that Lesson because You know the politicians see that this Is not the best outcome for them so They're going to just guarantee Everyone's audits now whether or not That currency buys the same amount of Energy that's the question that people Should be asking and very few ask Themselves that really are Intellectually armless intellectually Honest about their Investments and more Than that they're actually generating

Return that Chiefs their standard of Living constant I don't think many will Learn that lesson until there's you know Inflation hitting them in the face when They go to the store and you know they See that their their grocery bill goes Up five or ten percent you know year on Year or even month on month or day on Day whatever it doesn't really matter so Now I would like to touch upon the Regulatory situation in the U.S so we Have been witnessing in the last couple Of months an unprecedented Crackdown uh On crypto in the US what do you think is The rationale behind this sort of policy Approach let's again I think people need To make sure they don't take the wrong Lesson From from this and I think right now I Was focusing oh the US is cracking on The crypto This politician is saying that this Regulatory age is saying that And what they need to recognize is what Is the problem that the United States Financial system has and does that Problem manifest itself in other systems And other jurisdictions Okay what's what's the problem that the USS they have too much debt they have a Following working age population And you know they have no new forms of Energy that they're sort of inventing They make things more productive that's

Just about true for every major economy In the world And so what do governments do when they Have too much debt and not not a way to Earn it earn those a lot of it if you Can convince a population that they Don't need to own this crypto thing that It's perfectly fine to get boiled like a Frog with your capital in so in my Particular jurisdiction Then you don't have a lot of capital Fleeing to crypto fleeing to any other Sort of asset that they can't Um tax via inflation they don't want you To go anywhere they want your Capital Sit there And they'll make it very pleasant uh Pleasant journey to lose 20 30 40 50 60 Of your purchasing power over a period Of time such that the the debt load is a Is effectively lowered and the finances Are healthier so Arthur now I would like To discuss your price predictions for Bitcoin so you recently said that you Expect the price of Bitcoin to reach one Million dollar in this cycle so can you Guide us through this prediction So I think You know we're going to chop around for A bit probably this summer you know Maybe we go down to 25 000 maybe we go Down to 20 000 whatever it doesn't Really matter what really matters is Like how is this bacon crisis in the U.S

Progressing I think sometime in later This year we're going to see another few Banks almost by the dust and then it's Going to be explicitly clear that the Entire banking system is backstopped by The FED plus Treasury and once they do It then all their other sycophants at All the other central banks can now Follow right they can now do the same Thing oh the FED is in a quantitative Tightening and going back to cutting Rates we can too because we all have the Same problems we don't want to go Through the same sort of you know Market Dislocations that they have so now that They've done it oh it's great uh Powell's doing it you know Christian Lagar can do it You either the boj can do it ppoc you Can start public money too everybody's Got the same problem and now the Preeminent Central Bank has declared an Uncle and said okay you know what this Baking thing is bad we need to lower Rates to fix our banking system to you Know get the yield curve to be Normalized again which is short-term Rates lower than long term rights and That's going to be this the mother of All bull markets of of asset Bitcoin and Crypto is going to participate and then That's going to go I think sometime 25 26. yeah could Bitcoin go to a million Absolutely right there's

How many hundreds of trillions of Dollars of debt in the world right if You basically have said we're going to Backs up all of it and we no longer Allow the market to price what they Think the long-term rate of yield should Be in you know the major economic blocks Of the world then you know this guy's a Limit on on where Bitcoin a very very Small asset remember the door is very Small awesome thanks Arthur for talking To us and I hope to see you soon on our Show awesome all right great Foreign