Arthur Hayes has a message for cryptographic investors and Bitcoin (BTC) Hodlers obsessed with the federal reserve policy while the United States and China are heading for a commercial agreement: you are looking at the bad institution.
“The real spectacle is in the Treasury department. Ignore the Fed. It doesn’t matter,” Hayes told Coindesk in a recent interview. “Powell did not matter in 2022 as part of a democratic regime, and he now does not matter in a republican regime.”
For Hayes, the federal reserve has become a slideshow. The real monetary lever stroke, he argues, occurs under the secretary of the Treasury Scott Bessent, who quietly reshapes global liquidity with the buyouts and auction strategies designed to manage an American debt load in hot air balloon.
This flood of liquidity, associated with the inability of America to curb spending, is why Hayes says that Bitcoin heads around $ 1 million by 2028.
“All that interests us is if there are more dollars in the system today than yesterday,” said Hayes. “That’s all that matters.”
But monetary policy is not the only catalyst in its opinion. Hayes also sees geopolitics feeding fire, in particular commercial performance diplomacy between the United States and China. Like the posture of the two parties, Hayes says that they will probably sign an agreement which seems daring on paper but which does not change anything substance.
“It will be an agreement on the surface,” he said. “Trump must prove that he was hard for China. Xi must prove that he has resisted the white man.”
After all, China has proven with its cocvid era policies that it can withstand more economic pain. With politically risky prices, Hayes thinks that the next decision will tax foreign investments, a calm form of capital control intended to reduce America’s dependence on foreign buyers without scary national voters. This is how you bring the American people to swallow trade in trade.
“The only real policy that actually works is capital controls,” he said.
Potentially, there are several tools on the table. Not only taxes on treasury bills or actions abroad, but also more aggressive ideas such as exchanges of forced obligations, the negotiation of 10 -year tickets for a 100 -year paper, or the deduction greater than the taxation of taxes on the capital gains of American assets.
All this is part of a strategy to rebalance the financial account without forcing Americans to “buy less things”, a message he says that no politician can sell.
“Americans don’t like to do difficult things,” he added. “They don’t want to be told that you should consume less.”
China will continue to accumulate in American assets
China, on the other hand, is not going. Hayes says that he has no choice but to continue to buy American active ingredients even if he pretends the opposite.
“They must obscure the kind of thing they buy from America … But mathematically, they just can’t stop.”
For Hayes, all of this leads to one place: more money swinging in the system and Bitcoin absorbing the overflow.
His portfolio reflects this thesis: 60 to 65% in Bitcoin, 20% in ether (ETH), and the rest in what he calls “quality shitcoins”.
For what? Because the market is finally looking for parts that actually work.
“We are in the fundamental season. People are tired of the pieces that do nothing,” said Hayes.
