BitMEX founder and crypto veteran Arthur Hayes says Bitcoin (BTC) has a path to a $1 million price tag on the back of the Federal Reserve’s new Bank Term Funding Program (BTFP).
The BTFP offers loans of up to one year to banks, savings associations, credit unions, and other eligible depository institutions pledging U.S. Treasuries, agency debt and mortgage-backed securities, and other qualifying assets as collateral.
In a new interview on the Bankless podcast, Hayes says that the new program could cause a “merry-go-round” of US banks receiving endless amounts of money from the government in exchange for holding its bonds.
“It [will be] profitable for the banks to have a deposit base, buy every single issuance they can of US government debt, and if they ever need to give their depositors back money, they give their debt to the Fed, the Fed gives them dollars. So we go on this little merry-go-round and the US government gets to stuff bonds down the throats of the banks and everybody’s happy.Â
And that’s what I think the real end game is, and that’s how you get to Bitcoin at $1 million. Because that is yield curve control, that is the central bank cashing the checks of the government. A few steps removed, but it’s the same f•••••g thing. And that is where I think this program is beautiful – beautifully sinister but beautiful in some respect – and how it accomplishes this goal. People aren’t going to think about it until it exists, and obviously, they’ll say ‘oh it will end next year.’ There’s no way it’ll end this year.”
Recently, former Coinbase executive Balaji Srinivasan made a bet that Bitcoin would hit $1 million in 90 days because of sudden hyperinflation. While Hayes doesn’t think Srinivasan will win his bet, he does see the scenario playing out on a longer timeframe.
“So that’s the $1 million Bitcoin, but that doesn’t happen immediately. It’s a path there. I think it’s not entirely straightforward, but that’s where I see it going and I think Bitcoin eventually will discount that future. It’s not going to happen before June to help Balaji out, but I think [it will happen] as we start seeing the slow motion evolution of everybody getting a bailout and the guarantee expanding and expanding and expanding…”
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