BitMEX Co-Founder Predicts 8500% U.S. Debt Surge, Bitcoin's Rise

Arthur Hayes, the co-founder of BitMEX, has recently shared his insights on the evolving global financial landscape, particularly focusing on the decline of the U.S. dollar as the primary reserve currency and the potential benefits for Bitcoin. Hayes argues that the era of U.S. Treasury bonds and equities as the global reserve asset is coming to an end. Since the U.S. delinked the dollar from gold in 1971, the national debt has surged by 85 times, necessitating the creation of credit at a rate matching global economic growth. This dynamic has had mixed effects, benefiting some Americans while leaving others behind, a sentiment that fueled Trump's election.

Hayes predicts that once the U.S. current account deficit is eliminated, foreigners will no longer have dollars to purchase U.S. bonds and stocks. Countries adopting nationalist policies to boost their own economies will likely sell their U.S. assets for domestic liquidity. The unpredictability of U.S. policies, as exemplified by Trump's fluctuating stance on tariffs, further complicates the situation. This uncertainty means that the world cannot revert to the past, and each country must now prioritize its own interests.

In this new financial landscape, gold is poised to regain its status as a neutral reserve asset. While the dollar will remain the global reserve currency, countries will increasingly settle global trade by holding gold, as suggested by Trump. This shift requires gold to circulate freely and at a low cost within the new monetary system. Hayes criticizes those who cling to the old system, describing their denial as a fantasy that everything will eventually return to "normal."

For those looking to adapt to a pre-1971 global trade order, Hayes recommends investing in gold, gold mining companies, and Bitcoin. This strategy aligns with the anticipated decline of the U.S. dollar's dominance and the rise of alternative reserve assets. Hayes' analysis underscores the need for a proactive approach to navigating the changing financial landscape, emphasizing the potential for Bitcoin to benefit from these global shifts.