Arthur Hayes Latest Interview: Can the Rally Continue? Who Can Outperform BTC?

Via: The Rollup

Compiled by: Azuma, Odaily Planet Daily

Editor's Note: The well-known crypto-focused interview channel The Rollup has released its latest episode. This installment features Arthur Hayes, co-founder of BitMEX and a recently accurate market forecaster, alongside Mike Silagadze, CEO of ether.fi, who just launched a $40 million fund. Their discussion spans market outlooks, ETH/BTC price performance, BTC vs. gold, fundamental analysis, and more.

Below is an excerpt from the conversation—focusing primarily on Arthur Hayes' remarks—compiled by Odaily Planet Daily.

Q1: Has the correction ended?

Arthur Hayes: I believe the market has definitely bottomed around $74,500. At that time, the Trump team took an extreme stance on tariffs but was forced to compromise due to the severe downturn in financial markets—after all, they’re also facing the 2026 midterm elections.

The market has since found its floor, capital has returned, and Bitcoin has rebounded roughly 25%. Remember the market low after FTX collapsed in 2022? Then, Yellen chose to reduce the reverse repo rate from $2.5 billion down to zero, after which Bitcoin surged nearly sixfold. I expect a similar pattern this time—it’s the beginning of Bitcoin’s path toward $1 million.

Q2: How long can market liquidity and positive sentiment last? Is the rally still tied to expectations of rate cuts driven by Trump?

Arthur Hayes: Being overly focused on rate cuts misses the point. People keep trying to apply the 2008–2019 playbook—whenever quantitative easing (QE) kicked in and the Fed printed money weekly, buying assets became a sure bet. That reflex is deeply embedded in financial markets. But the rules have changed. When ordinary people realize QE leads to inflation, and inflation affects electoral outcomes, policymakers must innovate. Yellen’s move at the end of 2022 is a perfect example—not officially labeled QE, yet it created liquidity in practice, fueling massive rallies in stocks, crypto, and gold over the following 18–24 months until Trump took office.

Now people are still waiting for Powell to cut rates or restart QE—that’s like looking for a lost sword at the wrong spot along the riverbank.

Right now, the U.S. Treasury is executing a bond buyback program. It’s not as explicit as QE, but functionally, both provide leverage to buyers of government debt. With soaring deficits, trillions in new bonds will flood the market—meaning liquidity continues to flow, just under a different guise. If you wait for traditional QE signals before entering, you might still be hesitating when Bitcoin hits $500,000.

The real indicator to watch is volatility, especially the MOVE Index—the bond market volatility gauge. Whenever it breaches 140, policymakers act decisively. For instance, on April 8, when it spiked to 172 intraday, Jamie Dimon immediately criticized Trump’s tariff policy on TV—and Trump quickly reversed course. In September 2022, when MOVE exceeded 140, Yellen swiftly adjusted Treasury issuance structure, prompting an immediate market rebound. History repeatedly shows that as leverage across the financial system grows, policymakers’ intervention thresholds are lowering.

Trump, as a “volatility generator,” is actually bullish for Bitcoin. His habitual strategy—“maximum pressure, test reactions, rapid reversal”—feeds exactly the kind of unpredictability that crypto markets thrive on. We don’t need to predict policy direction; we just need volatility to rise—because today’s highly leveraged financial system simply cannot withstand sharp shocks.

Q3: Gold is also surging aggressively. Are Bitcoin and gold rising for the same reasons?

Arthur Hayes: I see gold and Bitcoin as different expressions of the same phenomenon—just purchased by different groups.

Ultimately, you hold gold because central banks buy gold; you hold Bitcoin because global retail investors buy Bitcoin. Both groups are escaping the same thing—excessive inflation and the potential collapse of the postwar fiat financial system.

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

Arthur Hayes: The key lies in understanding how “basis trades” work. Hedge funds exploit price differences between cash bonds and futures contracts using high leverage. As the Treasury relaxes bank capital requirements, these funds can participate in Treasury auctions with greater leverage. While the Treasury’s buyback program itself doesn’t create new liquidity, by keeping the Treasury market functional, it enables continued bond issuance. Against a backdrop of a 22% surge in the deficit ratio (first six months of FY2024 vs. prior year), this mechanism effectively sustains liquidity supply through financial engineering.

Q5: Which tokens can outperform Bitcoin? Will it 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 answer hinges on entry price—if you bought ether.fi at $0.55 (Odaily Planet Daily note: the other guest in this interview is Mike Silagadze, CEO of ether.fi), and assuming Mike’s vision materializes, it could indeed outperform Bitcoin. But if you buy in at inflated prices, even if the project generates $1 billion in revenue, the percentage return from that higher base may still lag behind Bitcoin.

Any asset can surpass Bitcoin, but only based on two variables: your purchase price range, and the income growth trajectory during your holding period. There are many cash-flow-generating tokens that remain underpriced. When the “alt season” or “fundamentals season” arrives—typically when Bitcoin dominance peaks—these assets have explosive potential.

Q6: Has Bitcoin’s market dominance already peaked?

Arthur Hayes: I don’t think so.

Institutional investors and family offices are undergoing a cognitive awakening. Trump has shattered the illusion of “American exceptionalism,” exposing how this empire prioritizes its political base over capital security.

This capital will begin to grasp Bitcoin’s significance. They’ll increase gold holdings, reduce exposure to Nasdaq and Treasuries, and shift toward assets uncorrelated with the current system. This migration will first concentrate in Bitcoin rather than other tokens—the wealthy won’t jump straight into altcoins.

Q7: I heard Maelstrom (Arthur Hayes’ fund) is doing some M&A work, integrating new crypto businesses?

Arthur Hayes: We’re running a small M&A fund. There are solid crypto businesses generating strong cash flows that have been misunderstood by traditional investors.

We have great flexibility in capital deployment because it’s all my own money—no PPM restrictions. We’re evaluating several companies and may execute a leveraged buyout of one, acting as sponsors to improve operations. The crypto space has many niche, high-cash-flow businesses—some aren’t even pure blockchain plays but service providers. Traditional private equity investors often overlook them because they lack the high-growth profile of a Coinbase. But if we assume this sector will grow, we’ll need services only crypto-native firms can provide.

Q8: What are your criteria for selecting assets at this stage?

Arthur Hayes: First, I look for protocols or businesses with users paying real money—spending stablecoins or other cryptos out of their own pockets, not relying on token incentives. A prime example is exchanges: Hyperliquid is a standout case, growing from zero to capturing 10–20% of the perpetual futures market within 18 months. They’ve built an extremely efficient order book system, and trading fees directly fund token buybacks—a simple, logical business model.

The second critical factor is how token holders benefit. Many highly profitable projects—like top-tier DEXs—don’t share profits with token holders. Take Uniswap: no matter how much the protocol earns, holding UNI gets you nothing. That’s why I don’t care about its price at all. If a project raises funds via token sales but refuses to let the community share in its success later, it’s simply a scam.

My investment criteria are clear: first, real paying users; second, a defined profit-sharing mechanism—whether through buybacks, dividends, or other forms. Only then can I calculate expected APY, conduct discounted cash flow analysis, and assess whether the current valuation is justified. Over the past six weeks, I’ve been patiently building positions in such projects, as irrational sell-offs created fantastic entry points—many strong cash-flow protocols were dumped solely for being “not Bitcoin,” creating golden opportunities.