Preparing for Bull Market Phase Two: Arthur Hayes’ Guide

Everybody is wondering when are we going To see the effects of the Bitcoin haling Kicking in and having like an impact on The trajectory of Bitcoin price so I Mean you can look at the previous Very closely is the upcoming US Presidential election not because the US Is important just because it's the us But more so it's the global Empire its Financial policy influences what the Chinese the Japanese the Europeans all Do and so if you have an easing of Monetary policy because um Janet Yellen US Treasury secretary and Jerome parl The FED president are doing everything They can to make sure that Joe Biden Gets reelected and that basically means How do I reduce the cost of government Borrowing so that him and his Democratic Party can hand out more goodies to the Electorate and get reelected that's What's going to happen between now and The end of the year when you control the Um the purse of the government it's very Easy to do so by printing money Borrowing it and handing it out to People in various forms so essentially You think the um American elections are Going to be a net positive for the Crypto Market regardless of who wins Whoever wins they're campaigning on I'm Going to to give you something that you Don't have to pay for and I'm going to Pay for it by borrowing my money I'm

Going to pay for it by using the central Bank to print money and that's really What the fight is about the bill Market Is still going to continue obviously We've slowed down a bit and now we're Entering the summer the northern Hemispheric summer where things slow Down volatility declines and we're going To get a choppy range bond market but For those people who have Fiat and extra Cash that want to allocate to crypto This is the perfect opportunity to do so So why of the macro indicators that seem To have the biggest impact on the price Of Bitcoin is M2 so Global liquidity in Previous years we saw how that indicator Skyrocketed during the covid pandemic When governments were injecting massive Amount of capital into the economy in Order to prevent it from collapsing and Then we saw that later in 2022 that Indicator started going down and now It's pretty much flat so so I guess that That indicator should go up again in Order for Bitcoin to resume its bull run The problem with M2 is that it doesn't Capture all the things that are used as Credit money in the economy and every Time there's a new problem the Elites in Charge come up with a new way to confuse People about how they're going to print Money so maybe it's M2 maybe it's broad Banking reserves maybe it's the reserves Held at the Central Bank it depends on

Every single economy and how they want To print money but at the end of the day The goal is how do how do I stuff more Credit money through the economy without Getting a negative reaction from the Populist being like Oh what's all this Inflation I'm going to blame the people In charge so yes M2 is a good measure And at sometimes it works and then Sometimes it's flat but it's been flat You know for a while but you still see Gold in crypto doing very well you still See major Tech indices at on the new Time highs so there is an ample Liquidity it's increasing it just not Might be in the indices that people are Familiar with from how it operated in The past two contrasting narrative one Saying Bitcoin is not going to perform As well as in previous Cycles other Saying it's going to perform so much Better because of these spot Bitcoin ETFs what is your taking between these Two narratives so I go back to the first Thing I said was that the thing that got Us from 2009 to 2024 in that massive Central Bank printing government Spending that's going to continue now The addition of the ETF is very Important because now instead of just You know Muppets like us who aren't you Know fiduciaries or institutional Investors who are buying these things we Now have an Institutional Investor class

Who are saying the same things you have All these luminaries of the financial Services industry in the west saying the Same thing that I'm saying which is the Government spending by Western Democratic governments and allad China In there as well is unsustainable at These levels and they're questioning Whether or not owning a domestically Risk R free domestic currency bond is a Good idea for a fiduciary now if that Belief holds then these institutions can Now Express that view through a BL Rocker Fidelity or pick your large fund Managers Bitcoin ETF they don't have to Custody it they don't have to worry About who they bought it from they're Buying it from you know the Establishment itself and so they can Express this negative view on The Sovereign bond market directly into the Best performing asset in human history Over the last 15 years So while the growth in a might have Slowed the marketing machine of tradire Is just getting started these are the Most successful products ever for Black Rock and fidelli and the rest of these Fund managers do you think they're just Going to stop after three months of Course not they're going to be Advertising in all the mainstream Financial press this is a long game so I Think people are underestimating the

Stickiness of these flows that doesn't Mean that we're entering into you know a Kyle jaies and suju super cycle that's Complete there will be a Downturn in in the price of Bitcoin at Some point but I think that our Expectations need to realign with the Fact that there's going to be even more Money printed by the major economic Blocks between now and the next Beer Market what do you think is a signal That people should look at in order to Understand the peak of this bull cycle How can people understand that we reach The top probably you're going to start Seeing some sort of positive real rate And Define the real rate as your 10-year Government Bond minus nominal GDP or Maybe there's going to be some major Global conflict and you know a Reordering of of the economic and most Political situation between the major Powers that sort of will culminate in Obviously some orgy of money Printing And after that our expectations might Just get ahead of us and that probably Is a signal that it's time to you know Come down in price do I have a specific Thing I'm looking for no it's more it's More of a feeling the fact that we're You know we just passed 70,000 now we're B at I don't know 63 or 64,000 Bitcoin And people are question in whether that Was the end of the bull market and we

Just started I mean this run really just Started November of uh 2023 well I would say that that probably Means that we're not even close because We have people inside of the ecosystem Are still doubting it when you say when You hear everyone saying we have Fundamentally changed the you know the Cycle of Bitcoin Bitcoin can never go Down when I start hearing more and more Of that from people who were doubting it At this point in time of the cycle Then I'll start to get a bit more Worried that our expectations of what You know money printer can do for Bitcoin are getting ahead of what will Actually happen but I don't think we're There yet so in some of your previous Interviews you said that you were pretty Excited about Solana and the ecosystem Around it at the same time you said that The Solana blockchain is dog I Guess because of these outages that um Have been affecting Solana in the latest Months so what in general is your view On Solana I like salana as a trading vehicle as a A high crypto beta momentum play so I Buy salana when I think the Market's About to start pumping I'll sell it when I think there's going to be you know a Downturn and I'll just play the yo-yo as It goes on do I think it has a Fundamental way to beat ethereum no I

Think it's suffering from the same Things that e suffered from in its come Up cycle right you had an advertised Throughput when in reality it's not There and there's various reasons for That I'm sure that's the salon Developers are hard at work trying to Fix them they've done a good job in Creating a culture around meme coins um A good uiu and some of their Applications but at the end of the day Was it the 10 or 20,000 or 100,000 you Know transactions per second that was Advertised to the community is complete that doesn't mean that the Chain doesn't work or that it doesn't Provide value it's just another example That you were able to bring something Successful to salana mcoin trading and It broke the network now does do that Mean that it's going to go to zero no I Do think there's a very engaged Community that likes to buy and hold This thing and therefore it's an easy Trading vehicle it's very liquid but I Don't see it long-term supplanting eth And I think that there are some other Layer one uh competitors that are going To see what's happening at salana make Some improvements and you could see a Very very hotly contested fight for that Number two spot behind ethereum I don't Think salana has a big mode here they Should be very worried people were

Looking for more positive bullish Narratives one of them was the potential Approval of a spot eum ETF I talked to a Few analysts Bloomberg analysts they Said that now they don't necessarily Expect that to happen anytime soon what Do you think I guess the fine soon I Said probably in the next 12 to 24 Months I think there'll be a spot Ethereum ETF there'll be a salana ETF There'll be every single other Cryptocurrency ETF that any of these Mafen managers can get through because If the Bitcoin one did so well and They're making so much money doing this Why wouldn't you do it for all other Crypto currencies these are passive Investing Behemoth they don't have a View on whether ethereum or salana or Bitcoin is good or bad per se it's more Like if the if the clientele wants it And you know the institutional retail Investors in the west want to own these Things instead of letting you know us Exchange owners offshore own these Things why not they own them themselves And so that's why there's going to be a Secular rise of different products There'll be a few obstacles put in place By The Regulators but at the end of the Day these are captured institutions and Whatever Larry wants to do he's going to Do it maybe it's not going to happen This summer but I have extreme

Confidence that by the end of this cycle There will be an ethereum ETF Black Rock Fidelity Vanguard all pick your name of Your major asset manager they'll have One because they make so much money Doing it why wouldn't you do it now I Wanted to ask you about another hot Narrative of this Crypt Market which is Layer twos on bitcoin this new ecosystem That is being built on top of Bitcoin How big do you think this thing is so Culture is the most important thing in Humanity right we do all this stuff and At the end of the day we have free time And we do cultures Sports Arts go to Nice restaurants go to see a play Whatever it is so when we can bring Culture to the blockchain ecosystem we Can on board the next billion people Because that's what they care about Someone is more likely to go spend a few Hours in line to buy a Louis Vuitton bag Than they are to learn about Financial Freedom and use metamask and so if we're Able to bring something that people Actually care about intrinsically which Is digital art or some other type of Culture and we're able to trade it and Experience it natively on a blockchain Then you're going to see orders of Magnitude more engagement from those who Otherwise wouldn't participate an Example crypto kitties broke ethereum in 2017 dog with hat and other mean coins

Broke salana in 2024 ordinals runes brc2 these things Are going to fill blocks they're going To provide transaction fees for miners Who now have just lost half their block Subsidy it's going to elay these Concerns of what are we going to do with A block subsidy goes away Bitcoin well Humanity's culture is going to be on Chain and that is extremely bullish for The Bitcoin ecosystem melr my fund we've Invested in oil a ordinals wallet and We'll continue to make other investments In this space as I believe this is the Most important thing that we have to get Right as a crypto ecosystem if we can Bring culture on chain then we bring the Users we are going to see the market uh As you say trading sideways probably for A while uh people are uh still willing To make money with crypto what do you Think is the best way at this point to Gain some some sort of passive income Using crypto so I I can't speak to What's best for every sort of investor But I can tell you what I do and what we Do at Maelstrom so on one end there is It I don't want to have any sort of Cryptocurrency risk but I want to earn a Return in the cryptocurrency ecosystem And what we do with that situation is we Have you know Large synthetic dollar positions in Athena so there

Usde this Stak usde yields anywhere you Know it's in the past between 10 to 60% Apy and that's because they're able to Capture the uh basis Cash and Carry Yield on ethereum versus US dollar and Bitcoin versus US dollar Perpetual swaps And the ethereum staking you now when You deoy this strategy you don't have Any R price risk of ethereum or Bitcoin If the market goes up in crypto that's That's fine you don't make any more Money you make your 10 20% whatever it Is it's a variable rate it could go Negative as well right there's Definitely that RIS serious actually I Want to touch upon Etha because it's a Controversial sort of project people Remember what happened with terraluna They were promising unreal rates and Then of course the scheme collapsed uh We remembered Celsius last uh in the Last bull market uh it ended up Collapsing as well because it was pro Pro promising like un real rates why People should trust a project like like Etina at least on The Superficial level Level it's been often compared to uh USD What would be your response well that as You said all right there a superficial Response of lack of understanding of What you're doing if you are have that Opinion and you lost money in teruna That's probably because you didn't read The white paper the white paper clearly

Showed what would happen in the Situation where the peg broke to the Downside and it was a textbook Definition of a death spiral so if you Lost money because you didn't read that Then that's your fault and for Athena Athena could fail Absol absolutely it Will not fail because the peg broke and They minted you know infinite amounts of Luna to essentially try to keep the peg That had a zero value that's not why Athena could fail people say oh the Athena interest rate is very high well It's very high because we're in a bull Market mode and speculators on the long Side are willing to pay a high rate of Interest to get leverage exposure to Ethereum and Bitcoin and other cryptos Athena is essentially capturing the cash And carry or basis trading strategy that Has been around since I've been trading Crypto in 2023 packaging that up and allowing you To tokenize that and so yes you can you Can mimic the exact same thing that Athena is doing without putting your Money with the protocol but if you want To use the usde or St us throughout the Defi ecosystem then this tokenized form Is a step change in how we can integrate Protocols together Arthur I just want to Ask you if you could um if you could Give us your price outlook for Bitcoin In terms of let's say end of the year

End of this bull market what sort of Price range are you looking at so end of The year I think we're going to be Between 70 to $100,000 on the price of Bitcoin end of 2024 my you know long-term sort of this Cycle all-time high anywhere between you I think it's going to be somewhere close To a million US dollars for one Bitcoin On the upside that's my prediction I Hope we get there Um whether we we get even close that'll Be good wow but that's quite uh Impressive most of the predictions for The top of this cycle are much more Moderate so the difference between this Cycle and all the previous ones is the Geopolitical and macroeconomic situation Of every other major power and that is We are in the midst of changing the World order I don't know what that new World order will be but the people who Who make money off of the old old order Don't want to to change and therefore They're going to print more money than We've ever seen in human history to try To Forstall that change the change will Still happen um they will still get Swept aside by the tides of history but In in its wake we have Bitcoin and that Allows us to escape thanks a lot Arthur For being on our show it's always a Pleasure thank you for having me [Music]

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