Bitcoin(BTC)
$
105,140 is once again the focus of attention with its $1 million price predictions. Arthur Hayes, the former CEO of BitMEX, believes that radical changes in the U.S. economic structure will be the catalyst for this rise. According to Hayes, the repatriation of foreign capital and the depreciation of U.S. Treasury bonds will be fundamental drivers for Bitcoin to reach this ambitious target. He suggests that by 2028, if this scenario unfolds, the largest cryptocurrency could become not just a mere investment tool but a refuge for global capital.
Historical Shift in U.S. Bonds and Foreign Capital
Arthur Hayes posits that the method the U.S. has utilized for decades to finance its trade deficit is becoming unsustainable. Countries with trade surpluses like China, South Korea, and ### have long parked the dollars they earned from selling goods into U.S. bonds.
However, as the value of these countries’ currencies increases, this capital is starting to return home. If foreign interest in U.S. Treasury bonds declines, financing the government’s record debt levels will become more costly. Hayes argues that this cycle will force the U.S. to print more money, highlighting limited supply assets like Bitcoin. Additionally, as long-term bond prices fall and yields rise, capital markets will become turbulent.
Capital Controls and Shifting Economic Realities
In the U.S., policies aimed at reducing imports and bringing production back are unlikely to be effective without voter support. High tariffs, a favored strategy of Trump, raised consumer prices and triggered voter backlash. According to Hayes, strategies have evolved, and capital controls have taken the stage.
Methods such as imposing a 2% annual tax on foreign ownership of U.S. financial assets aim to deter foreign investment. This could provide resources for reducing income taxes and push foreign capital out of the U.S. As capital flows shift, the dollar may weaken, while cryptocurrencies like Bitcoin could gain value.
Hayes also asserts that these capital controls will be implemented gradually. Like a frog slowly boiling in water, markets will adapt to this new order. Ultimately, turbulence in the U.S. bond market will force a relaxation of monetary policy, leading to another Bitcoin rally.
Preparing for the Next Bitcoin Rally
Hayes mentioned that his fund, Maelstrom, reduced risk in January, resuming purchases by late March or early April. He revealed an aggressive increase in crypto positions following the “Liberation Day” financial crisis. He emphasized that the rise won’t be limited to Bitcoin; altcoin projects with revenue models and value-transferring mechanisms would also shine, citing examples like Pendle (PENDLE) and Ether.fi (ETHFI).
Arguing that Bitcoin will become central in the transformation of the global financial system, Hayes predicts that the $1 million price target will be achieved by 2028. He believes that capital controls, the outflow of foreign capital, and the continued monetary expansion by the U.S. are sure to pave the way for this target.
