Original Title: Global Instability Is Fueling the Greatest Crypto Boom Yet with Arthur Hayes and Mike Silagadze

Original Source: The Rollup

Original Translation: Azuma, Odaily Star News

Editor's Note: The well-known cryptocurrency interview channel The Rollup has updated its latest conversation today. The guest speakers in this episode are Arthur Hayes, the co-founder of BitMEX, who has had excellent performance in market predictions recently, and Mike Silagadze, CEO of ether.fi, who has just launched a $40 million fund. The discussion covers multiple layers of content including market predictions, ETH/BTC price performance, BTC vs. gold, fundamental analysis, etc. The following is a selection of the conversation (with a focus on Arthur Hayes' statements), translated by Odaily Star News.

Q1: Has the correction ended?

Arthur Hayes: I believe the market has definitely bottomed out around $74,500. At that time, the Trump team took an extreme stance on tariff issues, but had to compromise under the pressure of a sharp decline in financial markets — after all, the Trump team also faces pressure from the 2026 midterm elections.

So the market has bottomed out, funds have returned, and Bitcoin has rebounded by about 25%. Do you remember the market low after the FTX collapse in 2022? At that time, Yellen reduced the reverse repo from $2.5 billion to $0, and then Bitcoin rose nearly six times. I think we will see a similar upward pattern, which is the beginning of Bitcoin heading toward $1 million.

Q2: How long will market liquidity and positive sentiment last? Is the current rise still related to the expectation of interest rate cuts pushed by Trump?

Arthur Hayes: Focusing too much on interest rate cuts is misplaced. People always try to apply the experience from 2008-2019 — when quantitative easing came, the Fed printed money every week, and buying assets would guarantee profits, which has become a reflex in the financial market. But the rules of the game have changed now. When the general public realizes that quantitative easing means inflation, which affects the ruling party's election prospects, the policy toolbox must be updated. Yellen's operation at the end of 2022 is a typical example — although not a nominal QE, it created liquidity in some form, driving a surge in stocks, crypto, and gold over the next 18-24 months until Trump took office.

Now people are still waiting for Powell to cut rates or restart QE, which is like looking for a sword in a boat.

The U.S. Treasury is currently implementing a bond repurchase program, which is not as direct as QE, but essentially provides leverage to bond buyers. With government deficits expanding, tens of billions of new debt will flood the market, meaning liquidity is still being injected, just under a different guise. If you wait for traditional QE signals before entering the market, you might still be watching when Bitcoin reaches $500,000.

The real data to watch is volatility, especially the bond market volatility index (MOVE). When this index breaks above 140, policymakers will definitely intervene: for example, on April 8th, when it reached 172, JPMorgan CEO Dimon immediately criticized Trump's tariff policies on TV, and Trump quickly changed his position; after the MOVE index broke 140 in September 2022, Yellen quickly adjusted the bond issuance structure, and the market rebounded immediately. History repeatedly shows that as financial system leverage increases, the intervention threshold of policymakers is decreasing.

Trump, as a "volatility generator," is actually beneficial for Bitcoin. He often uses the strategy of "extreme pressure - testing reactions - quick turnaround." This unpredictability is exactly the fertilizer that the crypto market loves. We don't need to predict the direction of policy, as long as volatility rises, we can make money — because a high-leverage financial system cannot withstand severe fluctuations.

Q3: The rise of gold is also fierce, is the logic of Bitcoin and gold the same?

Arthur Hayes: I think gold and Bitcoin are different expressions of the same phenomenon, just different groups buy them. Ultimately, I think you hold gold because central banks buy gold, and you hold Bitcoin because global retail investors buy Bitcoin. They want to escape the same thing — high inflation and the possible collapse of the post-war fiat financial system.

Q4: Why does debt refinancing inject liquidity into the system?

Arthur Hayes: The key is to understand how basis trading works. Hedge funds profit from the price difference between spot bonds and futures contracts, combined with high leverage. As the Treasury relaxes bank capital requirements, these funds can participate in Treasury auctions with higher leverage. Although the Treasury's repurchase program itself does not create liquidity, it maintains the operation of the Treasury bond market, allowing the Treasury to continue issuing bonds. In the context of a 22% increase in the deficit rate (in the first half of fiscal year 2024 compared to the same period last year), this mechanism is essentially maintaining liquidity supply through financial engineering.

Q 5: Which tokens can outperform Bitcoin? Will they be those with real cash flows?

Arthur Hayes: This reminds me of Buffett's famous quote: "Price is what you pay, value is what you get."

The key to this question depends on the entry price — if you buy ether.fi at $0.55 (Odaily Star News note: the other guest in the interview is Mike Silagadze, CEO of ether.fi), assuming Mike's vision is realized, it could indeed outperform Bitcoin. However, if you buy at a high price, even if the project generates $1 billion in revenue, the percentage return from that starting point will be difficult to beat Bitcoin.

Any asset can surpass Bitcoin, but it depends on two variables: the purchase price range and the income growth curve during the holding period. There are many under-priced cash flow tokens, and when the "alt season" or "fundamental season" comes (i.e., the peak of Bitcoin's dominance), they do have explosive potential.

Q 6: Has Bitcoin's market share already peaked?

Arthur Hayes: I don't think so.

Institutional investors and family offices are currently experiencing a cognitive awakening — Trump has shattered the illusion of "American exceptionalism," exposing the essence of this empire that prioritizes its base voters over capital security. These funds will begin to understand the significance of Bitcoin, they will increase their holdings of gold, reduce their exposure to Nasdaq and US Treasuries, and allocate to assets that are decoupled from the current system. This migration will first focus on Bitcoin rather than other tokens — the wealthy won't start by buying altcoins.

Q 7: I heard that Maelstrom (Arthur Hayes' fund) is doing some M&A work, integrating new crypto businesses?

Arthur Hayes: We are operating a small M&A fund. There are some crypto businesses with good cash flows that have been misunderstood by traditional investors for certain reasons.

We have a lot of flexibility in capital deployment because it's all my own money, without PPM restrictions. We are looking at several companies and may do a leveraged buyout of one of them as a sponsor to improve its business. There are many high-cash-flow crypto businesses in niche areas, which may not be entirely blockchain businesses, but service providers. Traditional private equity investors don't like them because they are not high-growth companies like Coinbase. However, if we assume this sector will grow, we need certain services that only crypto-native institutions can provide.

Q 8: What are your criteria for selecting assets at this stage?

Arthur Hayes: First, I look for protocols or businesses that users actually pay real money for — not based on token incentives, but users paying stablecoins or other cryptocurrencies to purchase services. A typical example is exchanges, such as Hyperliquid, which grew from zero to 10-20% of the perpetual contract market in 18 months. They built an extremely efficient order book system, and the fees paid by users are directly used for token buybacks. This simple and straightforward business model makes sense.

The second key point is how token holders benefit. Many projects that have made a lot of money (such as certain top DEXs) do not give token holders any benefits. Take Uniswap as an example — even if the protocol makes a lot of money, holding UNI is useless, which is why I don't care about its price at all. If a project starts by raising funds through token sales, and then doesn't let the community share the profits after the protocol succeeds, that's just a scam.

My core criteria for investing in tokens are clear: first, there must be real paying users, and second, there must be a clear profit distribution mechanism — whether through buybacks, dividends, or other forms. This way, I can calculate the expected APY and perform a cash flow discount analysis to determine if the current valuation is reasonable. I have been patiently building up positions in such projects for the past one and a half months, because the irrational sell-off in the market has created an excellent buying opportunity — simply because they are not Bitcoin, they have been oversold, creating a golden pit for those protocols with strong cash flows.

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