The policy of the next US President Donald Trump is capable of devaluing the dollar, which will push the price of Bitcoin to $1 million, said the former head of BitMEX Arthur Hayes.
Arthur Hayes’ latest article points out that Trump’s economic policies may lead to a depreciation of the US dollar and one Bitcoin price reaching $1 million. The article said that Trump may adopt an economic development model similar to China, which will increase the money supply…
— Wu Blockchain (@WuBlockchain) November 12, 2024
The expert announced a similar guideline back in October 2023. Then he based his expectations on the limited issue of the asset, the prospect of approval of spot Bitcoin ETFs and geopolitical uncertainty.
All three factors remain relevant today. SEC registered BTC-ETF in January 2024, since then proceeds to the products have reached $26.2 billion.
In a new essay, Hayes noted that Trump could use a model of “American capitalism with Chinese characteristics.” The “America First” agenda bears similarities to China’s development path, which began under Deng Xiaoping in the 1980s and continues to this day.
It is to ensure nominal GDP growth by providing government tax breaks and subsidies for the relocation of critical industries. Eligible companies will receive low-cost bank financing.
To implement the program, the US Treasury will be forced to actively raise funds on the debt market, maintaining a huge federal budget deficit. At some point, the ex-CEO of BitMEX is waiting for the launch of the “endless QE“
Accelerating economic growth will lead to an increase in the money supply, a weakening dollar and higher inflation.
According to Hayes, holders of deposits and long-term bonds will suffer, while buyers of gold, bitcoin and shares of companies from the industries receiving financing will benefit.
At the same time, the first cryptocurrency may show more positive dynamics than in the period from March 2020 to November 2021.
During the pandemic, stimulus in the US reached $4 trillion. Against this background, the US debt burden fell from 132% to 115% of GDP. The expert suggested that to return this parameter to those observed in September 2008 (70% of GDP) it would be necessary to create $10.5 trillion in new loans.
Based on the correlation between the volume of bank lending and the dynamics of Bitcoin, Hayes estimated the price of the latter in this scenario at $1 million.
In October, Hayes predicted an increase in demand for digital gold as a result of the inevitable economic stimulus measures by the Chinese authorities.
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Source: Cryptocurrency
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