Hayes Again Emphasizes Bitcoin (BTC) Price Forecast of $250,000-$500,000..."Ethereum is the Key Beneficiary"

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Arthur Hayes reiterated his forecast of Bitcoin (BTC) reaching $250,000-$500,000, while maintaining Ethereum (ETH) as his largest position.

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer of Maelstrom, stated in an interview with the financial YouTube channel "The Rollup" on September 15 (local time) that he holds Ethereum as his largest position in preparation for an expansionary liquidity phase. He said, "Excluding Bitcoin, Ethereum is the asset where you can take the biggest risk without worrying about a 75% overnight crash due to protocol issues." He cited its relatively sluggish performance among major cryptocurrencies in the last cycle and its failure to surpass its 2021 peak of $5,000 as reasons for its high expected return relative to risk.

The key variable Hayes identified for his bullish outlook is dollar liquidity. He explained that he increased his positions even before the Federal Reserve's (Fed) balance sheet began to expand rapidly. He assessed that the current movement of Bitcoin, which rose from approximately $63,000 to $80,000, is not yet a significant change. He argues that a phase where the money supply accelerates, rather than a simple increase in liquidity, will be the real driving force behind the cryptocurrency surge.

He presented the Euro-Yen exchange rate as a leading indicator of expanding dollar liquidity. His logic is that if Japanese funds begin to sell European assets, the French financial market could be shocked. Hayes stated that large French banks account for about 20% of the repo market. He argued that if Japanese investors sell French government bonds and bank bonds, funding pressure on the French financial sector would increase, eventually leading to demands for an expansion of the money supply.

Hayes's next argument is that the withdrawal of funds from the French financial sector could also affect the US repo market. He believes that if French banks repatriate capital, the balance sheets they provide in the US financial market could shrink. He explained that in this process, the Fed might expand its asset purchases for reserve management purposes to fill the liquidity shortage. Hayes stated that if the Euro-Yen exchange rate falls from around 182 to 140-120, serious problems could arise in the French banking system.

Hayes emphasized that a large-scale increase in Bitcoin's price is only possible if these structural pressures actually lead to an expansion of the money supply. He said, "It is precisely this trend that will push Bitcoin to $250,000-$500,000," adding that mere policy announcements are not enough. He explained that his Bitcoin price target is supported only if a situation where the Fed rapidly increases liquidity becomes a reality.

[Key Summary of the Article]

-Arthur Hayes stated that he maintains Ethereum as his largest position in preparation for an expansionary liquidity phase.

-Hayes argued that a decline in the Euro-Yen exchange rate and instability in the French financial sector could trigger the Fed's liquidity expansion.

-He predicted that if the actual money supply expansion accelerates, Bitcoin could rise to $250,000-$500,000.

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