Crypto Strategist Warns: Tariff Truce Masks Capital Controls, Boosts Crypto Appeal

Arthur Hayes, a prominent crypto strategist and co-founder of BitMEX, has issued a warning about the broader implications of the recent 90-day tariff truce between the US and China. While many celebrate this agreement as a diplomatic victory, Hayes sees it as a temporary pause in a much larger and more complex economic conflict. He argues that the underlying trend is the gradual implementation of capital controls, which are becoming increasingly important in the global economic landscape.

On May 12, 2025, the US and China agreed to reduce tariffs on each other's goods for a period of 90 days. The US reduced its import tariff on Chinese goods from 145% to 30%, while China plans to reduce its tariff on US merchandise from 125% to 10%. This truce is seen by many as a short break for both countries to resolve their differences. However, Hayes views this as a temporary respite from tensions rather than an end to the economic cold war. He believes that the current policy changes are masking deeper fiscal concerns, with nations turning to short, abrupt steps as they prepare for harsher and longer-term arrangements on financial regulation.

Hayes points out that the current state of economic mistrust is making cryptocurrency increasingly attractive. People are drawn to it not only as a volatile investment but also as an independent financial system that doesn't require government attention. This trend is further highlighted by the Texas House's approval of Senate Bill 17, which limits the land ownership rights of citizens and entities from certain countries. Hayes sees this legislation as a broader statement about the defense of domestic economies, indicating that economic protectionism is expanding beyond traditional trade barriers to restrict access to tangible and financial assets locally.

In this context, digital assets such as Bitcoin and decentralized stablecoins become a means of financial expression when the government regulates traditional markets. If traditional assets are limited by citizenship, borderless digital assets provide a freely available international financial network. Hayes argues that it is not inflation or central bank policy but capital controls that will trigger the next big wave of crypto adoption. These measures, as identified by Hayes, are early warnings of a larger trend where national leaders use various financial containment methods, ranging from curbing property rights to selectively altering tariff policies.

Cryptocurrencies, with their intrinsic nature, automatically counteract such restrictions. They are global, self-governed, and censorship-proof tools, valuable when governments deploy strict economic imperatives to seek national goals. Hayes believes that we are at a decisive point in this process, where old tools like tariffs and diplomatic agreements are being rapidly replaced by a new terrain of economic separating factors. As capital controls intensify globally, people will start turning to crypto to exercise sovereignty, not for profit but to control assets and protect their privacy.

Hayes' perspective is that the media often highlights short-lived tariff suspensions and windingly shredding land policies. However, he perceives a hidden movement that is essential: the increase in the degree to which countries pass more strict capital measures. Actions characterized as security or economic balance strategies often highlight the arising dynamic of how wealth flows across borders. This is another proof that the crypto movement is moving in the right direction. The more restrictions placed on centralized financial systems, the more attractive it will become for someone to pursue decentralized and permissionless alternatives such as Bitcoin. From Hayes’ point of view, the expanding scarcity of capital flows will make cryptocurrencies indispensable for financial security.