BitMEX Co-Founder Sees 184% Stock Surge for Banks from GENIUS Act

Arthur Hayes, the co-founder of BitMEX, has expressed his bullish outlook on Bitcoin (BTC) and major banks in response to the proposed U.S. legislation aimed at establishing a framework for dollar-pegged stablecoins. In a recent essay, Hayes highlighted that the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, which was passed in the U.S. Senate last month and is now awaiting consideration in the U.S. House of Representatives, could unlock trillions of dollars in liquidity and significantly boost markets.

Hayes believes that the GENIUS Act will enable too-big-to-fail (TBTF) banks, such as JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo, to issue stablecoins. These banks are considered critical to the economy, and their failure could have catastrophic consequences for the global financial system. According to Hayes, this legislation could unlock up to $6.8 trillion in liquidity, providing a substantial boost to the financial markets.

The BitMEX co-founder advises against investing in non-bank stablecoin issuers like Circle, suggesting instead that investors focus on Bitcoin and major banks. He argues that the U.S. government has effectively given TBTF banks the tools to launch a multi-trillion-dollar liquidity initiative, disguised as innovation. Hayes believes that the increased liquidity from banks issuing stablecoins, combined with other fiscal policy measures, could drive Bitcoin's price to $1 million, a tenfold increase from its current value.

Hayes also predicts that the stocks of these megabanks could see a significant surge, potentially tripling in value. He calculates that if the average price-to-earnings ratio of TBTF banks is 14.41x and multiplied by the cost savings and stablecoin net interest margin potential, it could result in a market capitalization of $3.91 trillion. Given the current market cap of approximately $2.1 trillion for the eight TBTF banks, this could mean an average increase of 184% in their stock prices.

Hayes' analysis underscores the potential impact of the GENIUS Act on both the cryptocurrency market and traditional financial institutions. By allowing TBTF banks to issue stablecoins, the legislation could inject massive liquidity into the market, benefiting both Bitcoin and major banks. However, it is important to note that these predictions are based on Hayes' analysis and should be considered speculative. Investors should conduct their own due diligence before making any high-risk investments.