Original Title: "Critical! Your Cryptocurrency Might Stop Rising! But These Assets Are Worth Buying │ Arthur Hayes │ Bitcoin Conference Vegas 2025 feat. @TheDavidLinReport"

Original Author: Arthur Hayes
Original Source: Bonnie Blockchain

Translation by: TechFlow

· Guest: Arthur Hayes

· Hosts: Bonnie & David Lin

· Air Date: June 16, 2025

Key Takeaways

In this episode of the podcast, Arthur Hayes, the inventor of perpetual crypto contracts, shares his outlook on the future economy. Having spent a major portion of his career in Asia, he has an in-depth understanding of Asian financial markets. He openly tackled financial questions that even Asian politicians often shy away from. What’s his view on the upcoming trends in the crypto space? Why does he believe most of the altcoins you hold may never rise again? And what’s his forecast for Bitcoin’s price movement?

Highlights

· Bitcoin’s price could hit $250,000 by the end of this year.

· Retail investors’ interest in Bitcoin remains strong due to its outstanding performance and its position as the most easily understood asset among all cryptocurrencies.

· Most altcoins may not see further growth this year because they lack "product-market fit," meaning their products fail to meet market demand. These projects usually don’t generate revenue that can provide returns to token holders.

· Compared to stocks or gold, Bitcoin’s scarcity and decentralized nature give it unique advantages in addressing currency devaluation and excess liquidity.

· When picking altcoins, it's important to focus on their "narrative," the story a project tells to attract investors and its underlying logic.

· Stay rational when purchasing altcoins and avoid blindly following trends.

· U.S.-China relations will gradually decouple, though not as rapidly as some predict.

· Most traders care less about whether a platform is fully decentralized and more about liquidity and the variety of trading products it offers.

· Trading platforms show little innovation in products, and fees are nearly uniform across the board. Consequently, the core of competition lies in marketing.

· Intergenerational conflicts are likely to increase, and governments may resort to heavy money printing to address these issues. This approach is often the easiest and most direct solution for governments.

Bitcoin Price Outlook

David: Could you elaborate on the timeline for Bitcoin reaching $1 million by 2028? You previously mentioned Bitcoin could hit $125k by the end of this year. Is that forecast still valid?

Arthur Hayes: I still believe Bitcoin can reach $250k by the end of this year. While there may be some volatility along the way, that’s my year-end target. As for the $1 million Bitcoin prediction, my assumption is based on the idea that, over the next few years, major global economies might print roughly $9 trillion in fiat currency. For instance, the U.S. government plans to support agencies authorized to create mortgage-backed securities, with an estimate of $5 trillion to be printed.

Additionally, with the implementation of the Supplementary Leverage Ratio (SLR) exemption policy, the banking system might purchase up to $1 trillion in assets, including those being offloaded by foreign investors. I think the banking system will gain more flexibility because they’ll no longer need to worry about capital requirements tied to Treasuries. Instead, they can pump more loans into the U.S. real economy. This will lead to industries such as manufacturing receiving increased credit support, and ultimately, some of this credit injection will flow into the cryptocurrency market.

David: When the Fed implemented quantitative easing in 2020, we witnessed an uptrend across nearly all asset classes—not just Bitcoin. While that undoubtedly benefited Bitcoin, from your analysis, it seems the same could apply to other assets like stocks and gold. Why do you believe Bitcoin will outperform other assets in this scenario?

Arthur Hayes: The primary reason lies in Bitcoin's fixed supply, which is strictly capped at 21 million coins. Additionally, compared to other markets, Bitcoin's market cap is relatively small. When large amounts of capital pour into a relatively small market, the price tends to spike rapidly. This is why Bitcoin has been the best-performing financial asset over the past 15 years. Compared to stocks or gold, Bitcoin's scarcity and decentralization give it a unique advantage in countering currency devaluation and excessive liquidity supply.

New Bitcoin Highs but Lack of Retail Interest?

David: The market is evolving rapidly. Do you think the ongoing monetary easing (money printing) will trigger more "Degen" activity?

Arthur Hayes: Yes, I agree. If you don’t hold significant financial assets and you’re painfully watching inflation erode your purchasing power, you might decide to put what little savings you have into high-risk investments in an attempt to hedge against this.

David: Why does the level of "Degen" activity seem lower now compared to 2021? I mean the interest in altcoins from retail investors. In fact, some people have observed that the viewership on crypto-related channels is significantly lower than four years ago, even though the price of Bitcoin and many other crypto assets have reached new highs.

Arthur Hayes: I think the main reason is that a lot of altcoins haven’t performed well. They suffer from valuation issues and are often overhyped. When you seriously ask, "Okay, your project has launched, the hype is gone, and now where are the customers? Where is the revenue?" the answer is often, "We don’t have any." Yet some of these projects carry fully diluted valuations (FDVs) as high as $5 billion. In that case, how do you expect the value to grow another 10x? That’s extremely difficult. Comparatively, going from $500 million to $5 billion is easier, but going from $10 billion to $100 billion becomes highly challenging on a marginal pricing basis. So, I think these altcoins are generally overpriced, making it hard to attract new investors.

David: Some say Bitcoin is now increasingly perceived as an institutional investment tool, and thus retail interest in it is waning. Do you think this argument holds water?

Arthur Hayes: Retail interest in Bitcoin remains strong because it has been performing incredibly well, and Bitcoin is by far the easiest crypto asset to understand.

Your Altcoins Might Not Pump Anymore

Bonnie: Everyone’s talking about whether alt season is coming. Some argue that there are too many low-quality projects this cycle. What’s your take on the current situation?

Arthur Hayes: I think most altcoins won’t rally this year because they lack “Product-Market Fit,” meaning their products fail to meet market demand. Additionally, these projects often do not generate revenue that benefits token holders. In other words, they resemble high "fully diluted valuation" (FDV), low-circulation venture capital-style tokens. Tokens of this type typically don’t perform well. So you see projects like Berachain and Monad whose prices are almost consistently trending downward. Despite having raised significant amounts of capital and generated a lot of hype, these projects struggle to attract real customers willing to pay for their products or services, making price appreciation difficult. However, there are exceptional projects out there that genuinely achieve Product-Market Fit, where users are willing to pay for their services or products. These revenues, in turn, flow to token holders via the protocol. I think projects that can achieve this dynamic will perform well, such as Pendle and Ethfi.

Bonnie: So, in the last cycle, those venture capital-backed tokens performed exceptionally well. Why is it different this time?

Arthur Hayes: The main reason is the lack of product-market fit. If a project's valuation is extremely high, but in reality, there are no users actively engaging with its blockchain or products, then reigniting market interest after a price drop becomes very challenging.

Bonnie: I remember in a previous interview, you mentioned that Bitcoin's market dominance could reach 70%. Do you think we would see an "altcoin season" at that point?

Arthur Hayes: Yes, I still believe that could happen. Currently, Bitcoin's market dominance is likely around 65%.

David: So, before Bitcoin reaches that target, is there a chance that other crypto assets could outperform?

Arthur Hayes: For now, I don’t see much evidence of that happening. I think Bitcoin's market dominance is largely dependent on Ethereum's performance. If Ethereum's price and market activity don’t experience significant changes, then Bitcoin's dominance percentage is unlikely to see a major shift. Currently, Ethereum's popularity appears to be declining, and many investors have lost interest in it. So, if the market cycle shifts, I’d lean more toward betting on Bitcoin rather than other assets.

How to Pick Altcoins?

Bonnie: How do you personally select altcoins? What factors do you usually focus on?

Arthur Hayes: I mainly focus on the "narrative," which is the story behind a project and the logic it uses to attract investors. Right now, the market places more emphasis on whether a project can generate steady cash flow. If a project can produce substantial cash flow, that's a critical factor for me. Additionally, I look at whether investors can gain tangible returns through holding the project’s tokens.

Bonnie: What about valuation? Is that something you pay close attention to?

Arthur Hayes: For projects in their early stages, we generally set a very clear investment cap to ensure we don’t overpay. But for projects with better liquidity, I focus more on whether they can generate consistent cash flow.

Bonnie: Don't you think the "narrative" changes too fast? It feels really hard to keep up with the pace.

Arthur Hayes: Absolutely, but if you buy in at the right price, it won't be an issue. If you can get in when the price is low enough, you're likely to profit once the project launches. However, if you're chasing market trends and buying at inflated prices to jump into every hot project, the end result is often a loss. The key is to stay rational and avoid blindly following the crowd.

The Inventor of Cryptocurrency Perpetual Swaps

Bonnie: Can you briefly share what inspired you to design perpetual swaps? How did this idea even come about?

Arthur Hayes: Actually, the idea came from feedback we received during our early operations. My co-founders and I were handling all customer support requests, and we noticed that many users struggled to understand traditional futures contracts. They were often confused about why futures prices differed from spot prices or why futures had expiration dates. These questions not only frustrated users but also consumed a lot of our time in explanations.

So, we started thinking: could we design a trading product with no expiration date and also offer high leverage? That was the initial motivation behind the creation of Perpetual Swaps. After multiple iterations, we finally developed a product that was easier for users to understand and officially launched it in May 2016. Initially, most people weren't very interested in this new product, but over time, more and more users began to adopt it because it addressed real user pain points while also easing the burden on us from repeatedly answering the same questions.

Personally, I usually don't trade with leverage. If I invest, it's typically through directly purchasing spot assets. I would recommend that only those who have enough time to study the market and are skilled in trading use leverage. However, if you don't have the time to deeply research or lack patience, it's better to avoid leverage, as the risks are quite high.

Bonnie: If I were to use perpetual swaps, what do you think I should focus on first? Risk management or position sizing?

Arthur Hayes: The most important thing is to clearly define your goals. You need to know exactly what you want to achieve—for instance, how much profit you expect to make, how much risk you're prepared to take, and under what circumstances you'd cut losses or add to your position. All of this should be planned out before you start trading. Once you're in the market, emotions can easily cloud your judgment, often leading to poor decisions. Proper preparation is the key to successful trading.

Will the U.S. Government Really Start Buying Bitcoin?

David: You mentioned a potential risk. If the Democrats win the next presidential election in 2028, they might cancel the U.S. Bitcoin Strategic Reserve. If the strategic reserve is really canceled, do you think the market would face significant selling pressure?

Arthur Hayes: It's possible. This largely depends on how much Bitcoin the U.S. government has accumulated and the fiscal situation at that time. I don’t think their holdings would reach as high as 200,000 BTC (which is the amount of Bitcoin the U.S. government has seized through judicial processes). If the government faces budget pressures, those Bitcoins would very likely be sold. So, there’s a great deal of uncertainty here, but it could indeed become a source of funds.

David: Could they potentially go the other direction and buy more Bitcoin? After all, they haven’t proactively done so thus far.

Arthur Hayes: I think the idea of the U.S. government proactively buying Bitcoin is politically infeasible. If the government were to allocate public funds, they would typically choose to cut taxes, build bridges, or construct hospitals—projects that directly benefit the majority. Buying Bitcoin, an asset held by a smaller subset of the population, wouldn’t fit that narrative. In theory, the U.S. government could do this—anything is possible. But from a political perspective, it’s not a prudent choice. If the government had a significant pool of discretionary funds, spending that money on Bitcoin wouldn’t exactly resonate as the most voter-friendly decision.

David: But the government already wins votes through other policies, so they wouldn’t need to do something like that.

U.S. Financial Regulation and Money Printing

Bonnie: You mentioned that the U.S. might impose capital controls. Is that correct? Specifically targeting the asset ownership of foreign investors?

Arthur Hayes: Yes. I think they might start by eliminating the “withholding tax exemption.” Under current regulations, foreign investors holding U.S. bonds do not have to pay the 30% tax that domestic investors are subjected to. If this policy were to be removed, it might make foreign investors view U.S. Treasury bonds as less attractive, prompting them to redirect their funds into other investment channels. I think this trend could gradually start to take shape.

Bonnie: Does this mean the market will therefore crash?

Arthur Hayes: No, it won’t. Even if foreign investors pull out, the U.S. government can print money to fill the funding gap, thereby preventing severe market disruptions.

David: In fact, we saw a similar scenario earlier this April—both bond and stock prices fell, Bitcoin's yield also declined, while bond yields rose. So my question is, if the U.S. does impose capital controls, would it trigger similar market reactions again, causing asset prices to drop across the board while reducing liquidity in the U.S. financial system?

Arthur Hayes: I believe capital controls would be introduced in a gradual manner and would not lead to extreme market volatility. The government is aware that abrupt policy changes could lead to undesirable consequences, such as dramatic bond market fluctuations or even a loss of control over the situation. With a phased implementation of capital controls, they could offset funding gaps through other means, such as leveraging the Federal Reserve, the Treasury Department, the banking system, or certain private entities authorized to create credit at lower costs, to replace foreign investors forced to sell off assets.

David: Recently, we’ve observed correlations reappear between stocks, Treasury yields, and Bitcoin. Do you think this correlation will persist?

Arthur Hayes: I don’t think it will. In the future, certain risk-aversion events are likely to occur, which would increase market volatility. Under such circumstances, Bitcoin might play a more significant role as a risk-hedging tool.

Buy All Assets? Buy Non-U.S. Assets?

Bonnie: You previously mentioned "buy all assets and experience the American life." Later on, you talked about the "breakup" between the U.S. and global capital. Do you think this relationship will continue, or will it eventually lead to a split?

Arthur Hayes: I think the relationship will gradually become more distant, but it won’t end as quickly as some predict.

Bonnie: So when do you think this "breakup" is likely to happen?

Arthur Hayes: It might take decades.

Bonnie: So, if foreign capital does gradually withdraw from the U.S. market and flow back to local markets, what kind of impact will this have on the global economy? What would the specific scenarios look like?

Arthur Hayes: Currently, the reason foreign capital flows to the U.S. is because the U.S. market performs relatively well across areas like stocks, bonds, and real estate, which attract substantial investment. If this capital withdraws from the U.S. and returns to local markets, it could negatively impact the performance of U.S. markets. On the other hand, for emerging market countries like Indonesia or Thailand, this could present an opportunity. Capital returning to these markets could drive currency appreciation, thereby increasing the purchasing power of local consumers. With enhanced consumption power, people might choose to invest and start businesses in these countries to cater to the growing market demand. This shift could invigorate emerging market economies and foster growth.

U.S. Stablecoin Legislation

Bonnie: Regarding the stablecoin bill, do you think this might force stablecoin issuers to purchase more U.S. Treasuries?

Arthur Hayes: I don’t think so. I believe this bill is more about enabling banks to engage in activities similar to what Tether is doing. If I were a bank and could now create my own stablecoin, I could essentially acquire deposits at zero cost. At the same time, if the supplementary leverage ratio exemption were removed, I could also use these deposits to buy U.S. Treasuries and earn stable returns from it.

Bonnie: I’ve heard a viewpoint from the head of a trading platform claiming that other countries don’t need to try as hard because the U.S. already has an edge in the competition for cryptocurrency and Bitcoin dominance. After all, the underlying asset people use to buy Bitcoin is USDT, and USDT is pegged to the U.S. dollar.

Arthur Hayes: I disagree with that perspective. In reality, one of the largest cryptocurrency revenue markets globally is Korean traders. Therefore, I don’t think the U.S. entirely dominates this space; it’s just one of many players in the ecosystem.

Open Interest Indicator

David: Recently, Bitcoin futures open interest hit an all-time high. I looked up my notes, and on May 22, the total open interest amounted to $89.8 billion, increasing by $15 billion in just five days. This reflects an unprecedented level of leverage in the market. What’s your take on this phenomenon?

Arthur Hayes: This really just indicates that the market's interest in this space is continuously increasing, right? Obviously, Bitcoin's price has hit an all-time high, and at the same time, more leveraged positions are being built. The market generally assumes that the price will quickly surpass 110K or even higher. So, I think this reflects a sense of optimism.

David: Based on your past experience at BitMEX, what kind of market reaction usually occurs when there is a surge in open interest for futures contracts?

Arthur Hayes: I think one key point to focus on is the "basis" expansion. Simply put, this refers to the premium between Bitcoin futures prices and spot prices. As of now, we haven’t reached particularly extreme situations, such as a premium exceeding 10%.

David: In BitMEX trading, do you think there are specific indicators that can predict significant market volatility? Are these indicators consistent?

Arthur Hayes: Honestly, I haven’t found any definitive indicators that can be used to predict such scenarios. And to be frank, I haven’t delved deeply into these data points either. So, there are no actionable conclusions I can share at this point.

Decentralized Trading Platforms Under Fire (Hyperliquid)

Bonnie: A recent incident involving the JellyJelly meme token has sparked controversy over whether Hyperliquid is genuinely decentralized. If a centralized exchange can intervene or influence you with $10M at its disposal, is it truly safe to use so-called decentralized trading platforms like Hyperliquid?

Arthur Hayes: Clearly, Hyperliquid might not be as decentralized as it markets itself to be. It appears that the Hyperliquid team chose to prioritize protecting the purchasing power of their HLP token rather than strictly adhering to market liquidation rules for the Jelly token. From this perspective, yes, it is not entirely decentralized. However, on the flip side, this also shows how much they value HLP, as it’s the backbone of many market operations. For me, this actually increases my confidence in trading on Hyperliquid. After all, most traders don’t really care whether a platform is fully decentralized; they care more about liquidity and a rich variety of trading products. If Hyperliquid can provide these services in a relatively decentralized manner, that’s good enough, and we can trade on it with confidence.

Intense Competition Between Trading Platforms and Banks

Bonnie: Many centralized trading platforms are expanding into the payments space because it seems like the obvious next step for them. What’s your view on the evolution of trading platforms over the next 10 years?

Arthur Hayes: I believe the market is already in a fully competitive state. The products offered by various trading platforms lack significant innovation, and fees are largely the same across the board. Therefore, the crux of competition lies in marketing, especially in the U.S. Right now, all the banks are beginning to offer similar brokerage services, making survival increasingly challenging for centralized trading platforms. If banks like JP Morgan were to prohibit their clients from purchasing Bitcoin, trading platforms like Coinbase and Kraken would find it very difficult to maintain their profit margins.

David: Speaking of Coinbase, in recent weeks, some major trading platforms have gone public via IPOs, accelerating the mainstream adoption of cryptocurrencies in the S&P 500 Index (SPX). Do you think that now, anyone investing in the S&P 500 needs to be aware that they are indirectly gaining exposure to Bitcoin via these index funds?

Arthur Hayes: I don’t think that’s something significant to focus on. Many investors are simply buying index funds without much thought—they hold ETFs (Exchange-Traded Funds), and ETFs include a mix of assets that might not align with their personal preferences. But they don’t care; they just want to engage in the market.

David: Regarding the development of trading platforms, as centralized trading platforms become more mainstream, do you think they might attract deposits away from everyday users and traditional financial institutions like JP Morgan or Bank of America?

Arthur Hayes: I don’t think so, because these banks have stronger distribution networks than cryptocurrency companies.

David: So, in the foreseeable future, there won’t be direct competition between the two sides?

Arthur Hayes: Actually, there is direct competition, right? If JP Morgan allows users to buy Bitcoin while Coinbase also provides similar services, the end result is that users are purchasing the same Bitcoin. The core of competition then boils down to transaction fees. If JP Morgan can offer zero-fee trading because they can profit through other banking operations, whereas Coinbase remains reliant on its high-margin brokerage business, how will Coinbase respond?

David: If you were to create another BitMEX today, how would you prepare yourself to handle the traffic of the crypto market?

Arthur Hayes: I would focus on attracting more "Degens." I wouldn’t try to compete in the Bitcoin trading space, as that would be a loss-making venture. Instead, I’d concentrate on meme coins and new project launch platforms. I think there’s more revenue to be made by optimizing the token issuance process rather than competing in the Bitcoin-to-USD trading market, which is a low-margin, high-competition space.

Squid Game of the East

Bonnie: You’ve spent quite a bit of time in Asia. I’m curious—what are some things about money and investing that you’ve learned in Asia that are strikingly different from the United States?

Arthur Hayes: I think there’s generally less trust in governments among Asians, which makes them more cautious and skeptical when it comes to investments and wealth management. Their saving habits are also quite different; for instance, gold plays a significant role in many Asian households, and real estate investment is extremely common. These mindset differences shape their unique investment approaches.

Bonnie: So would you say their investment style is more risk-averse or aggressive? And why is Korea's cryptocurrency trading volume so high?

Arthur Hayes: That boils down to a few factors. First, Korea has extremely high internet penetration, making it easy for people to access online trading platforms. Second, Korea’s gaming culture is highly developed, and this exposure makes young people more open to the concepts of digital assets and virtual economies. Additionally, Korea’s society is relatively homogeneous, and competition is very intense. Despite Koreans having a high overall education level, high-paying jobs are relatively limited, so many people find it hard to achieve financial freedom through traditional careers. As a result, many look to trading stocks or cryptocurrencies as alternative pathways. This intense competitive spirit drives up trading volumes.

The New Generation’s Investment Perspective

Bonnie: The older generation holds significant wealth, and they’re looking to fund their retirement by selling assets to the younger generation. However, the problem is that the younger generation doesn’t seem eager to buy and accumulate these assets but rather prefers to spend on experiences. How do you think this phenomenon will evolve?

Arthur Hayes: I think it will be fascinating to watch the regulatory developments surrounding cryptocurrencies or other digital assets in the future. Currently, baby boomers (people born between 1946 and 1964) hold a significant amount of stocks, real estate, and other assets. But the question is, will there actually be anyone willing to buy these assets? Perhaps some young people might be interested in large suburban houses or urban apartments, but overall, I’m not so sure. So, if the older generation needs to sell these assets to fund their retirement and the younger generation is unwilling to take them on, it could become a major issue. Worse still, if asset prices decline, the wealth of the older generation may shrink, making it unaffordable for them to sustain their retirement. At that point, governments might choose to address the pension gap by raising taxes, shifting the burden onto the younger generation. But will the younger generation accept this arrangement? That remains uncertain.

Bonnie: So, what do you think might happen?

Arthur Hayes: I think we could see a lot of generational conflict. Although I can’t predict the final outcome, I do believe governments are likely to respond to this problem by printing a lot of money. After all, for governments, this is the simplest and most straightforward solution.

Arthur's Fund Strategy

David: What are the current priorities for Maelstrom's asset allocation?

Arthur Hayes: The majority of our portfolio is allocated to Bitcoin, with a significant allocation to Ethereum as well. Additionally, we are involved in several project-related investments, including advisory roles and direct investments. For some low-liquidity but promising projects, such as Ethereum and Pendle, these are currently among our key holdings.

David: How often do you adjust your Bitcoin allocation?

Arthur Hayes: Overall, we don’t trade very frequently. There might only be one or two significant buy or sell actions per year because we prefer not to overtrade. Our goal is to outperform Bitcoin's returns. If we discover a new project that outperforms the capital we allocate by selling Bitcoin, we’ll use those profits to buy more Bitcoin.

David: We’ve spoken with some Bitcoin maximalists before, and they believe the way to outperform Bitcoin is simply to buy more Bitcoin. What’s your take on that?

Arthur Hayes: I don't completely agree with this perspective because it also depends on the time frame. For example, consider a token that rises from $7 to $300. If you invested at $7 and sold at $300, then within that time frame, your return would have obviously outperformed Bitcoin.

David: Last question, what’s next for Maelstrom? Are there any new expansions or projects in the pipeline?

Arthur Hayes: We are launching an acquisition business. Specifically, we plan to raise funds from investors to acquire certain cryptocurrency companies. The management structures of these companies might be reorganized, and we will focus on adding new revenue streams. In the future, we also plan to go public via a SPAC (Special Purpose Acquisition Company) in the United States. We’ve already identified a target company and are preparing for fundraising, aiming to significantly enhance the company’s profitability through this initiative.

David: What type of companies and operations are you interested in?

Arthur Hayes: We are primarily interested in companies with highly stable cash flows and strong profitability. The company we have our eye on is performing well in terms of profitability and has healthy cash flows. We plan to execute the acquisition at a reasonable price.

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