BitMEX co-founder Arthur Hayes believes that bitcoin has only entered the early phase of a new bull cycle. In his opinion, the growth of the first cryptocurrency is linked to the fact that the US Treasury is more actively buying back government debt, which could add dollar liquidity to the markets.
Why Hayes Expects Strong Growth
Hayes connects bitcoin’s further dynamics with the expansion of the US long-term Treasury bond buyback program. If there are more free dollars in the financial system, part of the capital, in his estimation, could flow into the crypto market.
The entrepreneur expects that bitcoin will move to a “Parabolic Rally.” With a steady inflow of money, the investor believes the asset’s price could quickly rise to several hundred thousand dollars.
Hayes’s logic is built around bitcoin’s limited supply. Unlike regular currency, which the government can issue in large amounts, this cryptocurrency operates through blockchain, a peer-to-peer network, and rules embedded in open-source software.
The Fed, Bond Yields, and Pressure on the Dollar
If the US Federal Reserve starts to more strictly restrain the growth of government bond yields, this, according to Hayes, will increase pressure on the dollar’s purchasing power. In such a situation, investors more often look at instruments with limited issuance that can protect money from devaluation.
Hayes recommends that investors hold the first cryptocurrency and continue to accumulate it. He sees bitcoin not as an analogue of a bank transaction or a familiar payment system like PayPal, but as a separate financial instrument tied to cryptography, encryption, and a public-key crypto system.
From a technical point of view, every operation in the network is a transaction. Computer science describes such operations as actions with data, and in the blockchain they are additionally verified by network participants. That is why bitcoin is often considered not only as an asset but also as a technological model once proposed by Satoshi Nakamoto.
Bitcoin in Brief: How It Works
Simply put, bitcoin is a digital asset with limited issuance: there can only ever be 21 million coins. Its network operates without a single center: users send transactions, network participants verify them, and records are stored in the blockchain.
New coins appear through mining. Miners use specialized equipment and software to confirm operations and maintain the network.
Bitcoins can be stored in wallets: hardware, software, or paper. In practice, the most important thing is to control access to the wallet and not lose the keys, because it is the keys that allow you to manage the coins.
What Influences the Price of Bitcoin
The price of bitcoin changes significantly due to investor demand, inflows or outflows of dollar liquidity, Fed policy, and the situation in the US government bond market. In Hayes’s logic, limited issuance makes the asset especially sensitive to expectations around the dollar.
Buying or selling bitcoin is usually possible through crypto exchanges and specialized services where users make deals with the first cryptocurrency.
Parallels With the 2008 Crisis
Hayes compared the current situation to the period before the 2008 financial crisis. He drew attention to the growth of US government debt and the increasingly noticeable participation of authorities in the debt market.
According to the businessman, if this trend continues, demand for bitcoin as an alternative way to preserve capital may increase. Earlier, Arthur Hayes also suggested that bitcoin found a local bottom around $60,000 and could rise to $126,000 by the end of the year.
