BitMEX founder and veteran of the crypto space Arthur Hayes is doubling down on his stance that the US will go back to printing massive amounts of money, boosting many assets once again.
Writing in a new essay on his popular blog, Hayes says that the US government (USG) can only avoid expanding the money supply if it’s okay with letting the banking system collapse.
According to him, the political elite will not sign off on such a scenario.
“The only way the money printer doesn’t go brrr is if the USG decides it will let the banking system actually fail — but I have full confidence that the US political elite would rather print money than right size the banking system.”
Hayes says the US and the Federal Reserve are now at point where no matter which road it takes fiscally, Bitcoin (BTC) and potentially probably gold will rally to new heights. He weighs the different possible outcomes of high inflation and higher interest rates, or falling inflation and lower interest rates.
“If inflation stays high and the Fed continues raising rates — or even just keeps them where they are today — then more banks will fail, we’ll see more TBTF (too big to fail) bailouts, and the government will continue to support the creation of larger and larger TBTF banks. This would expand the supply of money and gold, and Bitcoin would rally.
If inflation falls and the Fed cuts rates quickly, eventually, banks would stop failing. But, this would reduce the price of money, and gold and Bitcoin would rally…
You just can’t lose owning gold and Bitcoin, unless you believe the political elite is willing to stomach a complete failure of the banking system”
The crypto entrepreneur reiterates that at some point, there will be an increase in the supply of money, or at least a decrease in the price of money, which will be bullish for Bitcoin, gold, and some “useful commodities.”
“Like it or not, the USD will continue to depreciate against hard assets like gold and Bitcoin, as well as useful commodities like oil and copper.”
At time of writing, Bitcoin is trading at $27,522.
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