The economic policies of the next US president, Donald Trump, could devalue the dollar, potentially pushing the price of Bitcoin to $1 million, according to former BitMEX CEO Arthur Hayes.
Arthur Hayes’ latest article points out that Trump’s economic policies may lead to a depreciation of the US dollar and one Bitcoin price reaching $1 million. The article said that Trump may adopt an economic development model similar to China, which will increase the money supply…
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Hayes had previously mentioned this target in October 2023, citing limited asset issuance, the potential approval of spot Bitcoin ETFs, and geopolitical uncertainty as reasons for his expectations.
All three factors remain relevant today. The SEC registered BTC-ETF in January 2024, with inflows reaching $26.2 billion since then.
In his new essay, Hayes noted that Trump might employ a model of “American capitalism with Chinese characteristics.” The “America First” program bears resemblance to China’s development path initiated under Deng Xiaoping in the 1980s and continuing to this day.
This involves boosting nominal GDP growth through government tax incentives and subsidies to relocate critical industries. Eligible companies will receive cheap bank financing.
To implement the program, the US Treasury will need to actively raise funds in the debt market, maintaining a significant federal budget deficit. At a certain point, the former BitMEX CEO anticipates the launch of “infinite QE.”
Accelerated economic growth will lead to an increase in the money supply, weakening the dollar and driving inflation.
According to Hayes, deposit holders and long-term bond investors will suffer, while buyers of gold, Bitcoin, and stocks in funded industries will benefit.
Bitcoin, in particular, may exhibit more positive dynamics than during the period from March 2020 to November 2021.
During the pandemic, US stimulus measures reached $4 trillion. Against this backdrop, the US debt burden fell from 132% to 115% of GDP. Hayes suggested that returning this parameter to the levels observed in September 2008 (70% of GDP) would require creating $10.5 trillion in new credit.
Based on the correlation between bank lending volumes and Bitcoin dynamics, Hayes estimated the latter’s price in this scenario at $1 million.
“As the available supply of the first cryptocurrency shrinks […] fiat money will seek refuge. Go long and stay long,” proposed the former BitMEX CEO.
In October, Hayes predicted increased demand for digital gold as a result of inevitable economic stimulus measures by Chinese authorities.