This article comes from: The Rollup
Compiled by Odaily Planet Daily ( @OdailyChina ); Translated by Azuma ( @azuma_eth )
Editors note: The Rollup, a well-known cryptocurrency interview channel, updated its latest episode today. The guests in this episode are Arthur Hayes, co-founder of BitMEX, who has a good record in market predictions recently, and Mike Silagadze, CEO of ether.fi, who has just launched a $40 million fund. The interview covers market predictions, ETH/BTC price performance, BTC and gold, fundamental analysis and other multi-layered content.
The following is an excerpt of some of the content of the interview (focusing on Arthur Hayess speech), compiled by Odaily Planet Daily.
Q1: Has the callback ended?
Arthur Hayes: I think the market has definitely bottomed out around $74,500. At the time, the Trump team took an extreme stance on tariffs, but was forced to compromise under the pressure of the financial market crash - after all, the Trump team was also facing the pressure of the 2026 midterm elections.
So the market has bottomed out, the money is back, and Bitcoin has rebounded about 25%. Remember the market low after the FTX crash in 2022? At that time, Yellen chose to reduce the reverse repo from $250 million to 0, and then Bitcoin rose nearly 6 times. I think we will see a similar upward pattern, which is the beginning of Bitcoins march to $1 million.
Q2: How long can the market liquidity and positive sentiment last? Is the rise still related to the expectation of rate cuts driven by Trump?
Arthur Hayes: Excessive focus on interest rate cuts is putting the cart before the horse. People always want to apply the experience of 2008-2019 - once the quantitative easing policy is implemented, the Federal Reserve prints money every week, and we can make a profit by buying assets. This has become a conditioned reflex of the financial market, but now the rules of the game have changed. When ordinary people realize that quantitative easing means inflation, and inflation will affect the election of the ruling party, the policy toolbox must be updated. Yellens operation at the end of 2022 is a typical case - although it is not nominal QE, it creates liquidity in some form, driving the stock market, cryptocurrency and gold to soar in the next 18-24 months until Trump takes office.
Now people are still waiting for Powell to cut interest rates or restart QE, which is completely futile.
The U.S. Treasury is currently implementing a bond repurchase program, which is not as straightforward as QE, but in essence it provides leverage to bond buyers. As the government deficit expands, trillions of dollars of new debt will flood the market, which means that liquidity is still being injected, just in a different guise. If you have to wait for traditional QE signals to enter the market, you may still be waiting when Bitcoin rises to $500,000.
The data that really needs to be paid attention to is volatility, especially the bond market volatility index (MOVE). When the index breaks through 140, policymakers will definitely intervene: for example, after hitting 172 during the intraday session on April 8, JPMorgan Chase CEO Dimon immediately criticized Trumps tariff policy on TV, and Trump immediately changed his course; after MOVE broke through 140 in September 2022, Yellen quickly adjusted the bond issuance structure, and the market rebounded. History has repeatedly proved that as the leverage ratio of the financial system rises, the threshold for policymakers to intervene is decreasing.
Trump, as a volatility generator, is a boon to Bitcoin. He is accustomed to the strategy of extreme pressure-testing reaction-quick turn, and this unpredictability is exactly what the crypto market loves most. We dont need to predict the direction of policy, as long as volatility rises, we can make money - because the highly leveraged financial system cannot withstand drastic fluctuations.
Q3: The rise of gold is equally fierce. Are the rising logics of Bitcoin and gold the same?
Arthur Hayes: I think gold and Bitcoin are different expressions of the same phenomenon, just with different groups buying them.
At the end of the day, I think you own gold because central banks buy it, and you own bitcoin because the global retail crowd buys it. They are all trying to escape the same thing - excessive 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 the basis trade works. Hedge funds use the spread between spot bonds and futures contracts to add high leverage arbitrage. As the Treasury relaxes bank capital requirements, these funds can participate in Treasury auctions with higher leverage. Although the Treasury repurchase program itself does not create liquidity, it allows the Treasury to continue to issue more bonds by maintaining the operation of the Treasury market - in the context of a 22% surge in the deficit ratio (the first six months of fiscal 2024 compared with the same period last year), this mechanism is essentially to maintain liquidity supply through financial engineering.
Q 5: Which tokens can outperform Bitcoin? Will they be those with real cash flow?
Arthur Hayes: This reminds me of Buffetts 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 Planet Daily Note: another guest in the interview is ether.fi CEO Mike Silagadze), assuming that the vision described by Mike is realized, it may indeed outperform Bitcoin, but if you take it at an inflated price, even if the project generates another $1 billion in revenue, the percentage return from that base point will be difficult to beat Bitcoin.
Any asset may surpass Bitcoin, but it depends on two variables: the purchase price range, and the income growth curve during the holding period. There are many cash flow tokens that are not fully priced, and when the alt season or fundamental season comes (that is, the peak stage of Bitcoin dominance), there is indeed the potential for explosion.
Q 6: Has Bitcoin’s market share peaked?
Arthur Hayes: I dont think so.
Institutional investors and family offices are now experiencing a cognitive awakening - Trump has shattered the illusion of American exceptionalism and exposed the essence of this empire that prioritizes core voters rather than capital security.
This group of funds will begin to understand the significance of Bitcoin. They will increase their holdings of gold, reduce their holdings of Nasdaq and US bonds, and instead allocate assets that are decoupled from the current system. This migration will first focus on Bitcoin rather than other tokens - the rich will not buy altcoins right away.
Q 7: I heard that Maelstrom (Arthur Hayes’ fund) is doing some mergers and acquisitions to integrate new crypto businesses?
Arthur Hayes: We are running a small buyout fund. There are some crypto businesses with good cash flow that are misunderstood by traditional investors for some reason.
We have a lot of flexibility in capital deployment because its all my own money and there are no PPM restrictions. We are looking at several companies and may do a leveraged buyout of one of them to improve its business as a sponsor. There are many niche high cash flow businesses in the crypto space that may not be entirely blockchain businesses, but service providers, which traditional private market investors dont like very much because they are not high-growth potential companies like Coinbase. But if we assume that this space will grow, we need certain services that only crypto-native institutions can provide.
Q 8: What are your criteria for screening assets at this stage?
Arthur Hayes: First, I look for protocols or businesses that users pay real money to use - not incentivized by tokens, but users pay for services with stablecoins or other cryptocurrencies. The most typical example is exchanges, such as Hyperliquid, which went 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 direct business model makes sense.
The second key point is how token holders benefit. There are many projects that are making a lot of money now (such as some top DEXs), but token holders cant get a piece of the pie. Take Uniswap as an example - no matter how much the protocol makes, holding UNI is useless, which is why I dont pay attention to its price at all. If the project party starts with issuing tokens for financing, and does not let the community share the benefits after the protocol is successful, it is simply a hooligan.
My core criteria for investing in tokens are clear: first, there must be real paying users, and second, a clear profit distribution mechanism must be established - whether through repurchases, dividends or other forms. This way I can calculate the expected APY, perform cash flow discounting analysis, and determine whether the current valuation is reasonable. I have been patiently laying out such projects for the past month and a half, because the irrational market sell-off has created an excellent buying point - simply because it is not Bitcoin and is oversold, it has caused gold pits for those protocols with strong cash flow.
