Bitcoin’s $3.4M Bet: Fed Yield Curve Control and Dollar Debasement Drive Demand

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer at Maelstrom, has issued a bold forecast for Bitcoin, predicting it could surge to $3.4 million by 2028. The prediction, rooted in anticipated U.S. monetary policy shifts under a potential second Trump administration, hinges on the Federal Reserve’s adoption of yield curve control (YCC), a strategy that could inject over $15 trillion in new credit into the economy. Hayes argues that such a policy, reminiscent of World War II-era fiscal interventions, would drive unprecedented credit expansion, with Bitcoin uniquely positioned to benefit due to its deflationary nature and historical correlation with credit growth. Arthur Hayes Predicts Bitcoin Could Reach $3.4M by 2028^[1]

Hayes’ analysis draws on historical data from the 1940s, when the Fed capped bond yields to finance military spending, creating expansive credit cycles. He posits that a similar approach—purchasing Treasury bonds at scale to suppress yields—could replicate this effect, with Bitcoin’s price rising in tandem with credit expansion. According to his calculations, a projected $15.2 trillion in new credit by 2028 could push Bitcoin to $3.4 million, assuming a 0.19% price increase per dollar of credit growth observed during the COVID-19 era. Arthur Hayes Predicts Bitcoin to Hit $250K by Year End^[2]

The former BitMEX CEO also highlighted Trump’s potential influence on the Fed, suggesting the administration could stack the Federal Reserve Board and Federal Open Market Committee with allies to enforce aggressive monetary expansion. Hayes emphasized that Trump’s fiscal agenda, including industrial reinvigoration and large-scale deficit spending, would require Fed cooperation to manage borrowing costs, further amplifying Bitcoin’s appeal as a hedge against dollar debasement. Arthur Hayes: Bitcoin Will Be “Markedly Higher” by 2028 Despite…^[3]

While the $3.4 million target has drawn skepticism, Hayes reiterated a more immediate bullish outlook. He recently predicted Bitcoin could reach $250,000 by year-end 2025, citing expected Fed rate cuts and Treasury liquidity injections as catalysts. The cryptocurrency, currently trading at ~$115,000, has shown moderate gains in recent months, with Hayes attributing short-term volatility to evolving market dynamics and political uncertainty. Bitcoin Price Prediction From Arthur Hayes: Why $3.4 Million Isn’t…^[4]

Critics, including European head of research at Bitwise Andre Dragosch, have questioned the liquidity-driven argument, dismissing it as a “useless banana.” However, Hayes maintains that Bitcoin’s role as a store of value will outperform traditional assets during periods of monetary expansion. He also noted that global liquidity trends, including U.S. Treasury buyback programs and regulatory shifts like the GENIUS Act, could further bolster demand for Bitcoin as a decentralized alternative to fiat. Arthur Hayes says Scott Bessent will force the Fed under Treasury…^[5]

The prediction underscores broader debates about monetary policy’s impact on crypto markets. If Trump’s administration implements YCC, it could redefine the U.S. dollar’s role in global finance while accelerating Bitcoin’s adoption as a reserve asset. For now, the market remains divided, with Bitcoin’s trajectory hinging on Fed actions, political developments, and the scalability of decentralized networks. Trump’s Stablecoin Strategy To Reinforce U.S. Dollar Dominance^[6]