BitMEX Co-founder Arthur Hayes believes that upcoming currency devaluation will drive up the prices of Bitcoin and stocks.
In a new analysis, the cryptocurrency veteran stated that he believes the economy is entering a new inflationary cycle, and BTC will “regain its magic.”
Hayes cited the Congressional Budget Office’s (CBO) prediction that the US federal budget deficit for the fiscal year 2024 will reach $1.9 trillion, the highest number outside of the COVID-19 pandemic.
Hayes explained, “There won’t be an economic recession. This doesn’t mean that a lot of people won’t fall into terrible financial situations, but America and peace will continue.”
The reason I point this out is because I believe fiscal and monetary conditions are loose and will continue to be loose. Therefore, using cryptocurrency is the best way to preserve wealth. I believe today will rhyme with the 1930s to 1970s, meaning that given I can still freely convert from fiat currency to cryptocurrency, I should do so, as the devaluation caused by the expansion and concentration of credit allocation through the banking system is coming.”
The BitMEX co-founder also believes that companies will use cheap credit to boost their stocks.
“Central bank governors create bank reserves by buying bonds, which lowers costs and increases the volume of credit. In private capital markets, the allocation of credit is to maximize shareholder returns. The easiest way to boost stock prices is to reduce the float through buybacks. Those companies that can access cheap credit, borrow, and repurchase stocks.”
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