Arthur Hayes latest interview: Trump's tariff policy is to please voters, Bitcoin will usher in a new round of gains

Source: Unchained

Broadcast time: April 8, 2025

Podcast guests: BitMEX Lianchuang, Maelstrom CIOArthur Hayes

Organized: BitpushNews

Abstract: In this podcast, Arthur Hayes discussed Trump's tariff policy and Bitcoin will benefit from global liquidity easing policies. He believes that Ethereum is the most undervalued mainstream L1 and will return to its historical peak before SOL. He is cautious about SOL and discusses his views on USDC publisher Circle's application for an IPO.

The following is the summary of the interview content:

Host: How do you view Trump’s tariff policy? Who will be the winner and loser of this tariff war?

Arthur Hayes: First of all, I will abandon the moral judgment of economic policy and focus on adapting to the situation and making profits from it. The quality of the problem is always relative, and it is better to adjust the investment portfolio than to be emotional.

If Trump really wants to zero out the trillion-dollar deficit every year and prove that his policies are effective to those who support him, the current move is completely reasonable.

But the other side of the coin is: when Japan and other countries earn US dollars through exports, in order to maintain their undervalued currency, they will not convert the US dollar back to their currency, but instead purchase US financial assets (mainly US bonds and US stocks). This is the reason why the US market has far surpassed the world in the past 20-30 years, and it is also the key to the US Treasury yields remain the same as 30 years ago after the debt scale increased by 7 times.

Trump tried to break this cycle: He told Americans "I will bring back quality jobs (especially for non-universities)" but at the cost of foreign financing support for the U.S. government and stock markets will weaken - because their dollar revenues are reduced. This is essentially a simple equation: the current account balance and the financial account balance increase and decrease.

As for the judgment of good or bad? From the perspective of Trump's policy logic, it is completely reasonable. But the key is: his voter base is mainly blue-collar class who is not highly educated; Democratic supporters are more wealthy groups with high education and financial assets. In the past 40 years of globalization, the former has been damaged by industrial migration, while the latter has benefited from corporate profits and rising stock markets. The two worldviews are destined to be in opposition, and Trump is fulfilling his promise to his basic balance.

Host: You seem to have avoided value judgments. As an American, do you personally agree with Trump’s policy goals?

Hayes: It depends on who you want to please. Data shows that more than 50% of those with annual incomes exceeding $100,000 voted for Harris; low-income groups support Trump more.

College degree is the core dividing line: those with high education are engaged in knowledge work (technology/finance/law, etc.); those with low education are traditionally engaged in manufacturing.

The reality in the United States over the past 40 years is that companies move factories to foreign countries to lower wage costs → profit growth → stock buybacks → shareholders benefit. However, manufacturing workers in the United States have fallen victim to globalization. Trump speaks on behalf of the latter, while the Democrats safeguard the interests of the former. There is no absolute right or wrong, only a game of different groups’ demands.

Host: You once predicted that the Federal Reserve would not tighten monetary policy due to tariffs. Do you now maintain this judgment?

Hayes: In my article on the BBC, I discussed in detail the phenomenon of "fiscal dominance" - the Federal Reserve is essentially a government financing tool. Former Federal Reserve Chairman Burns' famous speech in Yugoslavia in 1979 pointed directly at the core: When society believes that the government should solve all problems (which must be accompanied by fiscal expansion), the central bank's anti-inflation responsibility will give way to maintain the controllable cost of government financing.

Powell is in the same dilemma: strong U.S. economic data (growth overtrend, unemployment is historically low), but he abnormally slowed QT and cut interest rates in September/December last year. The root cause is $36 trillion in debt and its exponentially growing interest expenses. When rigid U.S. bond buyers such as Japan reduce U.S. dollar revenue due to tariffs, the Federal Reserve must take over—Powell has made a clear statement recently:

The QT scale will be reduced; consider using MBS maturing funds to repurchase U.S. Treasury bonds; call the impact of tariff inflation "temporary" (repeat the same mistake in 2022).

This fully reveals its true position: ensuring that the Ministry of Finance receives cheap financing. Trump’s so-called “reducing the deficit from 7% to 3%” is not a real austerity at all, but diluting debt through nominal GDP growth—Bitcoin will rise in the same simultaneous manner as gold is in this fiat currency flood.

Host: You previously predicted that Bitcoin would first exceed 110,000 instead of falling below 76,500. Are you correcting your views now?

Hayes: Maintaining the original judgment, 76,500 was the low in March last year, and 110,000 was the all-time high set when Trump took office on January 20. Because global liquidity is about to surge: the Federal Reserve/ECB/Japan Bank will be forced to release water, and Bitcoin will benefit from both deflation collapse and inflation outbreak

Host: You mentioned that Bitcoin may be decoupled from the traditional market, so what do you think of the future price trend of Bitcoin?

Arthur Hayes: I think the price of Bitcoin may rebound in the coming months. I had predicted that Bitcoin would break through $110,000 and then it could rise all the way to $250,000. It all depends on global liquidity and the monetary policies of the Federal Reserve and other major economies.

Host: What do you think about what happened recently in Hyperliquid?

Arthur Hayes: Obviously, I think people need to realize that decentralization in a lot of projects is just an ideal. Hyperliquid's position on this is clear. Although I don't know their technical details, this looks like centralized control. We have dealt with similar issues at BitMEX, and high-leverage and low-liquidity contracts are easily exploited. I think Hyperliquid developers should draw on the experience of other major exchanges, including those that copy the BitMEX model. They may need to review their margin policies and clearing mechanisms more carefully to avoid recurring similar incidents. This seemingly centralized behavior in decentralized projects is not new, and BitMEX and other major exchanges have faced similar problems.

Secondly, most people may actually be more concerned about price, speed and expense. As long as the trading experience is good and profitable, they don’t care much about how the underlying layer works. From the user's point of view, they may not care as long as they are compensated and can continue trading.

This is indeed a dilemma for decentralization. Investors and traders need to weigh the risks of using decentralized platforms, including potentially exploited by bad actors and the possible regulatory pressures. Platform teams also need to consider these issues, but the boundaries they draw may not always be exactly consistent. This is still a question of ongoing debate, with no clear answers to right or wrong.

Host: So what do you think about Circle 's upcoming listing?

Arthur Hayes: To be honest, I don't think Circle's IPO is worth investing. Circle's business model relies on net profit spreads, and its customer base already has many competitors, especially Tether.

In addition, Circle relies heavily on Coinbase as a distribution channel. They rely entirely on Coinbase's distribution department to survive, because most of their net interest income is given to Coinbase, and then Coinbase distributes it. So why should I buy Circle's IPO? If you want to have a leader, just buy Coinbase.

Host: What do you think of the current investment opportunities in the crypto industry? What projects are you currently focusing on?

Arthur Hayes: Our investment strategy is to strictly control prices and not blindly follow the trend of investing in popular projects. Many projects on the market are now overvalued, especially those in the early stages, so we are more inclined to invest in projects that have been baptized by the market and have fallen very low but still have high-quality projects.

Host: What do you think about Ethereum and Solana? Which one do you think will have more promising?

Arthur Hayes: From a risk-reward perspective, I think Ethereum has more potential.

Although Ethereum is currently seen by many as a less popular asset, it is this "hateful" asset that usually performs best when the market rebounds. Although Solana has performed well in the near future, its future development faces some uncertainty.

I always adhere to the principle of reverse investment - looking for the assets that are most despised by the market in the new cycle. Ethereum is a typical example at present. As the most questioned mainstream L1, it has the potential to return to the 2021 close to the all-time high of $5,000 in 2021, and this divergence of market sentiment and value creates excellent opportunities.

So if you ask me which one to invest in, I prefer Ethereum. Ethereum’s position in the entire crypto ecosystem cannot be ignored. Especially in terms of decentralized applications (dApps) and smart contracts, Ethereum is still the most competitive basic chain. As long as it can handle scalability issues, it still has great potential for growth.

Host: Back to Bitcoin, you mentioned that Bitcoin may reach $250,000, so when do you think this situation may happen?

Arthur Hayes: It depends on global monetary policy. I think that if major economies around the world continue to expand their money supply, financial markets will be full of rich fiat currency liquidity. In this way, Bitcoin, as an anti-inflation asset, will usher in a new round of rise. Therefore, $250,000 is not an impossible goal, especially around 2025.