CoinDesk reports:
BitMEX co-founder Arthur Hayes has issued a warning that inflation is looming due to global economic shifts and expansive fiscal and monetary policies. He believes cryptocurrencies, particularly Bitcoin, can hedge against the expected depreciation of fiat currencies in this environment.
Hayes explained that with the emergence of multipolar powers like China, Brazil, and Russia, the United States’ monolithic dominance in financial markets is waning. This shift, coupled with increasing government debt and money creation, indicates potential inflationary pressures. Hayes stated:
“The world is transitioning from a unipolar order dominated by the United States to a multipolar order led by figures in China, Brazil, Russia, and others. To finance government deficits, savers must endure fiscal repression, and central banks must print more money. World War III has already begun, with war leading to inflation.”
Additionally, the BitMEX co-founder underscored two types of historical periods—local and global—and urged market participants to assess these trends before making investment decisions. Local periods are marked by financial repression and war financing, resulting in inflation. Conversely, global periods foster relaxed financial regulation and global trade, leading to deflation.
Hayes also examined three major cycles since the Great Depression, highlighting how U.S. financial policies impact the global economy. The former CEO contends that sustained fiscal deficits and loose monetary policy signal continued inflation. He maintains that traditional financial assets like stocks and bonds will struggle to preserve value.
Hayes believes Bitcoin offers a superior store of value compared to gold, citing its decentralized nature and limited supply. Hence, he advises holding cryptocurrencies to safeguard against anticipated fiat currency depreciation.
As investors closely monitor financial markets, Hayes’s insights into fiscal and monetary policies provide valuable guidance amid uncertain economic futures.