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In his latest blog post, entitled ‘Kiss of Death’, former Bitmex CEO Arthur Hayes outlines a provocative position on the Bitcoin process and wider financial markets under the renewed presidency of Donald Trump. Hayes-Die has long been bullish views of Crypto held that a convergence of tax and monetary policy could catapult the price of Bitcoin up to $ 1 million during Trump 2.0 ERA, but only after a period of recession-driven unrest.
Bitcoin’s “Kiss of Death”
Hayes’s frame revolves around the ‘kiss’ principle – keep it simple, stupid – exaggerated market participants to stay focused on the core prices for assets: liquidity. Instead of being exaggerated to sensational headlines, he claims that one should look at shifts in the quantity and price of money (ie how much credit is created and with what interest).
“One day you buy and sell quickly after digesting the next head,” warns Hayes. “You use the market in the process and your stack will decrease quickly.” He recommends sticking to a simpler prospect: if the US government prints considerable amounts of money at lower rates, risk assets such as Bitcoin can rise.
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An important principle of Hayes’ analysis is that President Trump, a ‘real estate showman’ in the background, will finance his’ America First ‘agenda instead of embracing cuts. Hayes contrasts Trump with Andrew Mellon – the secretary of the Traps under Herbert Hoover – who was once explained: “Libidate Labsen, Liquuidate Stocks, Liquid Farmers, Liquidate Real Estate. It will purify the roteness from the system. ‘
Hayes claims that such an attitude would be political suicide for a president who wants to be seen as the 21st-century Franklin D. Roosevelt instead of Hoover. As Hayes says: “Trump wants to be considered the greatest president” and is therefore inclined to loosen credit conditions instead of sharpening them.
Hayes emphasizes Trump’s unconventional maneuver to lower federal expenses and possibly activate a recession, forcing the Federal Reserve to respond with tariff reductions and new liquidity. The newly formed Ministry of Government Efficiency (Doge), led by high -profile entrepreneur Elon Musk, is depicted as an aggressive effort to expose fraud and reduce waste in government programs.
Hayes quotes the claims of Doge that payments can go on social security for deceased persons or not – rejected identities, which supposedly cost hundreds of billions – or even a trillion – dollars per year. “Trump and Doge dismiss hundreds of thousands of government employees,” notes Hayes, referring to media reports with reference to increased unemployed claims in the Washington area, DC,.
By lowering the federal budgets so drastically and so quickly, Trump could – in Hayes’s words – cause a recession or convince the market that people are around the corner. “
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As soon as signs of recession appear, Hayes predicts the federal reserve goal Jerome Powell will have little choice, but to lower the rates, to terminate quantitative tightening (QT) and possibly restarting the quantitative reduction (QE) to prevent a widespread financial crisis. Powell, who calls Hayes a ‘Turncoat traader’ (a reference to the past of the Fed during the Kamala Harris campaign), is nevertheless bound by the mandate of the Fed to maintain economic stability.
Hayes points to $ 2.08 trillion in American occupational debt and $ 10 trillion in the debts of the American treasury that must be rolled out in 2025. If the economy slows down, that debt will be incurred at high interest rates. In that scenario, the only rescue of the FED is new money creation and lower rates.
Hayes calculates that a complete Fed response – which contains different policy shifts – can lead to no less than $ 2.74 to $ 3.24 trillion to new liquidity: the fall of the federal fund rate rate from 4.25% to 0% could be equal to around $ 1.7 Biljoen money prints, according to the Schaftingen from the Schaftingen from the Schaftingen from the Schaftingen, according to the Schaftingen from the Schaftingen, the Schaftingen, the Schaftingen, the Schaftingen, the Schaftingen, the Schaftingen, De Schaftingen, the Schaftingen, the Schaftingen, the Schaftingen, the Schaftingen, the Schaftingen.
The FED currently has $ 60 billion a month in QT. If QT ends by April 2025, Hayes sees a liquidity injection of $ 540 billion compared to previous expectations. Extra treasure chest purchases by the FED of American commercial banks (the last helped by a relaxation of the supplementary lever ratio) can add another $ 500 billion to $ 1 trillion to dollar credit.
He compares this with the $ 4 trillion in stimulus measures during the COVID-19 Pandemie. Given that Bitcoin jumped around 24x from his 2020 lows to 2021 highs in response to that liquidity wave, Hayes says that even a more conservative 10x more could be in the game. “For those who ask how we get $ 1 million from Bitcoin during the Trump presidency, this is how,” he explains, who links mass credit creation to a stronger BTC price.
Despite his bullish long -term prediction, Hayes believes that the immediate prospects of Bitcoin may be rocky. Hayes sees the potential for Bitcoin to re-view the range of $ 70,000 to $ 80,000 in the short term levels that are considerably above the all time of the earlier cycle, but still below the current market. “If Bitcoin leads the market to the disadvantage, this will also do this at the top,” writes Hayes, who states that BTC is often bottom for traditional shares.
He quotes the important run -up to $ 110,000 around mid -January (Trump’s inauguration time line) followed by a withdrawal to $ 78,000 at the end of February. “Bitcoin shouts that a liquidity crisis is almost almost, although the American stock market indices are still close to their highlights,” he notes. “I am firmly convinced that we are still in a bull’s cycle, and as such the soil will be the all time of the previous cycle of $ 70,000 in the worst case,” says Hayes, who underlined his conviction that big dips are opportunities to accumulate instead of panic.
According to Hayes, the “Kiss of Death” is not about the downfall of Bitcoin, but about the outdated Fiat system struggling to contain spiral guilt taxes and political Brinkmanship. He argues that the short-term chaos in traditional markets of doge-driven cuts and a hesitant fed will end the road for a new round of monetary expansion.
The Bottom Line? Hayes insists that staying focused on liquidity is the best strategy: “Let politicians do the things of politicians, stay in your lane and buy Bitcoin.”
At the time of the press, BTC traded at $ 83,725.
Featured image of YouTube, graph of TradingView.com