Arthur Hayes’ latest podcast: Got the script for next year, already fired 90% of my bullets

Source: Kyle Crypto Hunt

Translation | Odaily; Translator | Azuma

Editor's note: The industry legend, market forecaster, and BitMEX co-founder Arthur Hayes is back with another market prediction. In today’s episode of the Kyle Crypto Hunt podcast, Arthur Hayes shares his views on macro liquidity changes, market outlook, personal positions, and strategies.

The following is the full transcript of Arthur Hayes’ podcast discussion, translated by Odaily. For readability, some content has been condensed.

Opening Remarks

Everyone is waiting for the Federal Reserve to utter that “magic word,” as if once it’s spoken, everyone’s portfolio will skyrocket on the spot—“Quantitative Easing (QE) is here.” But if you’re still waiting for the Fed to announce it as directly as before, you’re like someone watching a foreign film without subtitles.

Today’s guest is Arthur Hayes. He is the co-founder of the cryptocurrency exchange BitMEX. Before entering the crypto space, he worked in trading at Citigroup and Deutsche Bank, and is an expert in macro analysis. You’d better grab a magnifying glass and take notes, because as he says: “The headline you’re waiting for will never appear.”

Part 1: The Latest Development — Bank of Japan Rate Hike

• Host (Kyle Chasse): Arthur, glad to have you on the show. Before we officially start, the most recent macro event is the Bank of Japan (BOJ) decision. By the time viewers see this, the decision should be out (Odaily note: it has now been confirmed as a 25 basis point hike). Do you think the rate hike will really happen? If it does, what does it mean for the market?

Arthur Hayes: Yes, after Kazuo Ueda (Odaily note: Governor of the Bank of Japan) spoke a few weeks ago, he basically made it clear that a rate hike was “on the table,” and the market quickly priced in a higher probability of a hike.

From what I’ve heard from people more familiar with the BOJ, the USD/JPY range of 155 to 160 is the BOJ’s “red line,” so they will take necessary measures—either a rate hike or some form of tacit FX intervention—to prevent the yen from depreciating further and breaking above 160.

I think this rate hike is probably just an adjustment from 0.5% to 0.25% magnitude (Odaily note: the final result was exactly as Arthur predicted). With official inflation at about 3%, this is almost meaningless on a macro level. It might make the market slightly more hawkish in the short term, but it won’t change the fundamental trend.

Part 2: The World’s Focus — The Next Fed Chair

• Host (Kyle Chasse): The biggest question now is who will succeed as Fed Chair. They all lean toward rate cuts, but the paths are completely different. Do you think if Kevin Warsh takes over, it would pose any threat to the risk asset environment?

Arthur Hayes: I always say one thing—the US President will ultimately get the monetary policy he wants.

If you look back at the history since the Fed was founded in 1913, the tug-of-war between the President and the Fed Chair is nothing new. This struggle has always been public, fierce, even ugly—Lyndon Johnson once physically confronted then-Fed Chair William Martin on his Texas ranch just to force a rate cut… So people think Trump’s harsh attitude toward Powell is nothing in comparison.

The key is not what that person “believes” before becoming Chair, but that once they’re in that seat, they’ll realize—they’re there to work for Trump. Trump wants lower rates, more money supply, a hotter market, and at the same time must seriously deny any link to inflation, or else he and the Republicans will lose the next election.

So whoever becomes Chair, the result is the same. They’ll use whatever tools are necessary to get the job done. Whoever ends up in that seat doesn’t matter, and I don’t care.

Part 3: The Lifeblood of the Stock Market — Can the AI Bubble Last?

• Host (Kyle Chasse): What’s your view on the tug-of-war between inflation and liquidity? If we start large-scale “money printing” as Kevin Hassett expects, the liquidity environment will obviously be very bullish, but usually the more you print, the higher inflation, and retail investors will still be under pressure.

Arthur Hayes: In my view, the “rules of the game” for the Fed and Treasury are actually very simple—the US economy is essentially a highly financialized economy, and the stock market is the US economy itself.

So ultimately, the authorities must ensure the stock market rises at all costs, and by extension, this means the AI wave must continue. I know some people are starting to question the AI bubble, saying a correction has already happened, but I think they’re looking at it all wrong. If you’re an equity investor, you should be long and accept some volatility. Shorting the Nasdaq or Nvidia now is reckless, because this bubble is far from bursting, and the authorities need it to persist.

Trump has bet the entire US economy on AI success. And for AI to succeed, the only way is more debt-driven growth, lower capital costs, and more money supply. He’ll keep doing this until he can’t anymore.

The problem is, this will bring inflation. So how do politicians seriously tell voters “these policies won’t cause inflation”? The answer is to rename it. Everyone knows Quantitative Easing (QE) = money printing = inflation. So the term QE can’t be used anymore—it will never appear again, because ordinary people know it means inflation, and people hate inflation, which would make them switch to supporting the Democrats in the next election.

Part 4: QE’s New Clothes

• Host (Kyle Chasse): You’re right, policies like QE just keep getting new names. In hindsight, it’s still easing, just looked different at the time. So what’s it called this time?

Arthur Hayes: This time, the new name is “Reserve Management Purchases” (RMP).

When this term first appeared, I spent quite a bit to consult macroeconomic researchers. I asked them, “Is this QE?” Most technical money market experts said: No, strictly speaking, it’s not QE. I asked some bond trader friends, and they also said it’s not QE, it’s something else. But if you ask more cynical macro analysts like me, we’ll say:

Technically no, but in substance yes—it will have the same effect.

The market’s current attitude (as represented by bitcoin, since it’s most sensitive to USD liquidity) is that this isn’t QE, but I think the market hasn’t truly understood what this is. Looking back at 2008–2009, when Ben Shalom Bernanke launched US QE, the market didn’t believe it at first. The S&P kept falling until it finally bottomed in March 2009.

Back then, Bernanke kept emphasizing that it was just a “temporary balance sheet expansion” and would be withdrawn in the future. But then QE went on round after round until it finally ended in 2021, and the market peaked and corrected sharply. So the key is, the market didn’t believe QE was money printing at first, until later when they realized: “Oh, this is money printing, let’s go!”

Today’s RMP is going through the same process. The Fed is buying short-term T-bills, not MBS or 10-year Treasuries. From a duration perspective, T-bills have less impact. If you assume the banking system is the main channel affected by this plan, then RMP is indeed not QE, but that’s not the case. The Fed is doing this to induce money market funds to lend more in the repo markets, which directly funds the US Treasury. So this is a way for the Fed to directly use money market funds and the repo market as intermediaries to finance the Treasury at the short end of the yield curve.

Over time, people will see the deficit isn’t falling, T-bill issuance keeps rising, and repo market usage grows. By then, asset prices will bottom and rebound, and the market will realize: “This is actually QE.”

Part 5: When Will the Market Bottom?

• Host (Kyle Chasse): What’s your timeline for when the market will realize this? You mentioned asset prices might bottom during this period—when exactly?

Arthur Hayes: I think from January next year, (asset) price performance will noticeably improve; but around March, the market will start worrying whether this “temporary program” will end, and there will be a round of turbulence; then they’ll confirm RMP will continue, and the rally will restart.

Part 6: Arthur Hayes’ Personal Strategy

• Host (Kyle Chasse): What are you doing now? How are you positioning personally? Are you risk-off or risk-on?

Arthur Hayes: We’ve probably fired 90% of our bullets, with a bit of cash left for volatility. Maelstrom (Odaily note: Arthur’s family office) doesn’t use leverage, so we’re not afraid of bitcoin briefly dropping below 80,000.

What we care about now is, what’s the next dominant altcoin narrative? Aside from bitcoin, our most successful altcoin position this cycle has been Ethena (ENA); we got in very early because we were fundraising advisors for the project.

I think the next round will be privacy and ZK-related directions. We have a fair amount of Zcash (ZEC) exposure now, but I think there will be some projects in this field that really explode and could become the best-performing altcoins in the next two or three years. I think 2026 is the time to find that project—we don’t know what it is yet, but as investors, our job is to look for opportunities.

Part 7: The Value and Risk of the Privacy Narrative

• Host (Kyle Chasse): Honestly, having all transactions exposed on-chain for everyone to see is really annoying, right?

Arthur Hayes: What people don’t understand is, they only see what I want them to see. If I want you to see it, you can; if I don’t, you’ll never see it.

So when you see those “wallet tracking tools” on X or other social platforms, take everything you see with a grain of salt. That’s not necessarily what’s really happening.

But in my view, for Zcash and other ZK projects, the core value of the privacy narrative is—if I really need to make sure no government, no adversarial company, no one at all can monitor what I’m doing, do I really have such a tool now? Clearly, there’s a fear underlying this, and your job is to take advantage of that fear. Even if three years from now it turns out the hottest “altcoin” of 2026 is total crap, it doesn’t matter—you can still make a lot of money before then.

• Host (Kyle Chasse): Do you think it’s possible—of course, I know it can’t be completely shut down or banned—but if the government really tried to say “using this stuff is illegal,” it would definitely scare a lot of people off, right?

Arthur Hayes: I think in today’s information age, governments have gotten much smarter. If you tell people “you can’t do something” but don’t have the means to fully enforce it, not only will people keep doing it, they’ll want to do it even more.

So now, governments don’t ban things directly, but restrict intermediaries, like limiting exchanges from listing privacy coins. The moment I was truly “brainwashed” by Zcash, I first bought a little on my phone, then contacted 8 brokers I know to get a quote for a multi-million dollar trade. Only 2 were willing to quote; the other 6 were banned by regulators from trading privacy coins.

Most exchanges now aren’t allowed to trade Zcash or other privacy coins. That’s how the government stops you from holding it. They won’t ban it outright—they just make it extremely hard for you to get it.

Part 8: What If the Prediction Fails?

• Host (Kyle Chasse): Based on your previous explanation, you’re bullish overall for 2026. Are there any key indicators, charts, or events that could overturn your view and make you very bearish in 2026–2027?

Arthur Hayes: Some might say that a bitcoin drop from 125,000 to 80,000 is just the beginning, and it could fall even further, and then argue: “Arthur, you keep saying money printing is coming, but bitcoin is still falling, clearly the market doesn’t believe your story.”

My answer is: “You’re right.”

I’m talking about a future state. I’m saying the market is now digesting a new “money printing” term, at least in the US. But perceptions can change, and that’s the risk I’m taking in this call. The market will validate the answer. If I’m wrong, then I’m wrong, but I’m putting real money on this call. We’ll witness the result together.

Part 9: Will Altseason Return?

• Host (Kyle Chasse): Will we see another altseason in the next year or two?

Arthur Hayes: I think people have serious selective memory about “altseason,” full of “could have,” “should have,” “if only” type assumptions.

You say you want altseason? Then think back to 2016–2017, when basically some guy posted a crappy PDF online and an address for you to send money. Did you send it? Most people didn’t, but plenty did and made a ton of money. Then think about the 2020–2021 NFT craze—everyone was trading ugly apes and penguins on the blockchain, even though you were taught since childhood that Rembrandt and Picasso were the pinnacle of art. Did you go crazy flipping NFTs? Many didn’t.

So don’t talk to me about altseason. In 2017 you didn’t dare take the risk, in 2020 you didn’t either, and in 2024–2025 with Hyperliquid you still won’t. Altseason has always been here—you’re just too timid to participate. What you want is that familiar altseason, because only then do you feel you know what to do, but cycles only bring new things, and what goes up is always something new. Either you adjust your mental framework, or you’ll always live in the past and complain altseason doesn’t exist, but that’s just because you didn’t buy the one that went up.

Part 10: Arthur Hayes’ Big Opportunities

• Host (Kyle Chasse): Is there anything you’re really excited about now but haven’t talked about much publicly? Not the well-known blue chips, but something higher up the risk curve.

Arthur Hayes: I might write an article about this at New Year. Maelstrom has a bunch of investment professionals, and I have a directional trading account where I just trade whatever I want.

Looking back at this year’s trades, overall I made money, but if you look at the stats, only about one-fifth were profitable, and I lost money on most trades. I threw a lot at some of the worst shitcoins or meme coins, but I really shouldn’t have touched that garbage. I just thought it was “fun” at the time, but that’s not my style—I shouldn’t be messing around in that crap.

I made the most on Hyperliquid (HYPE) and Ethena (ENA)—just catch those big swings. Luckily, we have enough capital to bet big on those coins.

One trade I like is ENA—you can check the on-chain records I allow you to see. I think ENA is at the early stage of a huge rally because it’s a rates game. As the Fed cuts short-term rates, if the RMP narrative is correct, then bitcoin will rise, people will want to lever up, they’ll be willing to pay a higher basis, and Ethena is the on-chain tool to capture that. Right now we’re seeing large-scale USDe redemptions, but I think this trend will reverse. Just like in September 2024, we’ll see ENA rise very quickly. Among our blue chips, this is probably one of my highest conviction trades—it fits my overall macro monetary thesis.

Part 11: Quickfire Q&A

• Host (Kyle Chasse): Now for the quickfire round. By the end of 2026, will bitcoin be higher, lower, or flat? What’s your price estimate?

Arthur Hayes: Higher. I previously said $250,000 by 2025, which clearly won’t happen. I’ll repeat the same target—$250,000 by 2026.

• Host (Kyle Chasse): Name a trade everyone loves but you think is a trap.

Arthur Hayes: Shorting Nvidia.

• Host (Kyle Chasse): What’s the most dangerous macro narrative in crypto right now?

Arthur Hayes: Central banks will tighten monetary policy.

• Host (Kyle Chasse): What’s the best signal for liquidity returning?

Arthur Hayes: You have to dig into central bank balance sheets and the banking system. The signal is never obvious, because they want to fool you.

• Host (Kyle Chasse): What’s your view on ETH’s positioning?

Arthur Hayes: The king of settlement.

• Host (Kyle Chasse): What’s the most underestimated risk in the market?

Arthur Hayes: Leverage.

• Host (Kyle Chasse): If you could, what would you ban from the collective sentiment of the crypto market?

Arthur Hayes: Stop thinking market makers are manipulating prices against you every day.

• Host (Kyle Chasse): If someone wants to see those wallets you “don’t want them to see,” what should they do?

Arthur Hayes: Use your imagination, my friend.