Is the export of Crypto Assets against inflation favourable? Arthur Hayes writes a long article calling for BTC to reach 250,000 and ETH to reach 10,000.

Arthur Hayes, the founder of BitMEX, in his latest long article “Time Signature,” uses the metaphor of dance rhythm to analyze how the U.S. financial market is about to enter a wartime economic model. He believes that the U.S. is leading the way through government-driven credit expansion and stablecoin reserve mechanisms, directing the bubble towards Crypto Assets, finding a way out for the massive deficit, and pushing Bitcoin and Ethereum towards the greatest opportunity wave in history.

The financial market is a dance, and only those who step to the right rhythm can profit.

Hayes first uses the rhythm of music as a metaphor for the operational logic of financial markets, emphasizing that dancing requires hitting the right beats, and investing must also follow the “credit creation (credit creation)” drumbeat of the financial market. The expansion of fiat currency supply is the fundamental rhythm that determines asset prices, while in the fixed supply systems of Bitcoin (BTC) and Ethereum (ETH), this rhythm is amplified into strong price fluctuations:

The most important variable in profitable trading is understanding how the supply of fiat currency changes. Especially for assets like Bitcoin, which have a fixed supply, the rate of expansion of fiat currency supply determines the rate at which Bitcoin prices increase.

He believes that “credit creation” is not only a macroeconomic term but also a quantifiable entry signal.

The American economic model must shift: from free market to fascist economics.

Hayes pointed out that in the face of escalating geopolitical confrontations, such as the ( US-China struggle, the Middle East and the Ukraine-Russia regions ), along with the imbalance in the US economy and debt structure, the United States must and is transitioning from a “free market” and “semi-capitalist (semi‑capitalist)” system to a different hybrid system that combines government leadership and market operations, known as “state capitalism (state capitalism).”

This is a model of credit allocation and industrial resource distribution led by the government, to put it in harsher terms, it is a “fascism (fascism) economic system.”

He took the American rare earth company MP Materials as an example, where the U.S. Department of Defense became the largest shareholder by investing and guaranteeing procurement volume, attracting giants like JPMorgan and Goldman Sachs to be willing to lend a large amount to MP Materials for expansion. The funds then flowed into the hands of workers, driving consumption and tax revenue, forming a kind of “state-authorized and led” economic expansion.

This case explains how the U.S. government intervenes and directs the flow of funds to promote an economy growth mechanism that appears to be market-driven but is actually state-led.

A new strategy against inflation: The U.S. government is blowing the bubble into the crypto market.

It is not hard to imagine that the above method will inevitably lead to severe inflation. However, Hayes believes that the U.S. government will choose to inflate this bubble for those who “won’t rebel,” just as China chose to channel funds into real estate in the past. For the United States, “Crypto Assets” will become a new bubble carrier:

Crypto Assets investors tend to be younger, often from minority groups, and have a strong awareness of political participation.

If this group of people becomes wealthy through Crypto Assets, they are likely to become a support base for the ruling party ( Republican Party ).

Crypto investment often enters through stablecoins, which in turn are backed by US Treasury reserves, effectively becoming a pool of US Treasury funds.

The logic is: “Printed money flows into Crypto Assets → Investors buy stablecoins → Minting stablecoins will buy U.S. Treasuries → There are buyers for government bonds → The inflation pressure bubble shifts to the crypto market.”

(Analyzing the Wall Street hot topic “Pennsylvania Plan”: Can stablecoins transform US Treasuries and restore the glory of the US dollar?)

Hayes embraces the bubble and goes long: Bitcoin 250K, Ethereum 10K

Hayes believes that the leader of this funding dance will be Ethereum and its DeFi ecosystem. He stated that the fund he operates, Maelstrom, has fully reallocated to ETH and other foundational DeFi protocols, and he also made predictions for the target prices of Bitcoin and Ether by the end of this year:

BTC: $250,000 USD

ETH: $10,000 USD

The total market value of crypto assets is expected to reach 100 trillion USD.

He emphasized that instead of opposing inflation, it is better to embrace it, and institutional funds will become a key driving force, especially retirement funds like 401(k) are expected to open up allocations for crypto assets. Even the possibility of Trump abolishing the capital gains tax on cryptocurrencies in the future is likely to accelerate the influx of funds.

Hayes stated: “On average, for every 1 dollar increase in the total market value of Crypto Assets, 0.09 dollars flow into stablecoins. Assuming Trump does his best, the market value is expected to rise to 100 trillion dollars before he leaves office in 2028, which is approximately 25 times the current value.”

If you think this is impossible, then you haven’t been involved in Crypto Assets long enough. This global influx of capital will create a purchasing power of about tens of trillions of dollars in U.S. treasury bonds for stablecoin issuers.

( Trump plans to open up the American 401(k) retirement plan to invest in crypto assets, with an expected scale of 9 trillion dollars ).

Is the article “Crypto Assets becoming an inflation export a positive sign?” Arthur Hayes calls for BTC at 250,000 USD and ETH at 10,000 USD. Originally appeared in Chain News ABMedia.