Interview with Arthur Hayes: AI Will Trigger a Financial Crisis—The Optimal Time to Buy Bitcoin Is When Central Banks Begin Printing Money
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Interview with Arthur Hayes: AI Will Trigger a Financial Crisis—The Optimal Time to Buy Bitcoin Is When Central Banks Begin Printing Money
Bitcoin is the “liquidity alarm” for global markets; central banks may need to print more money in the future than they did during the pandemic, and investors should wait until central banks begin printing money before buying Bitcoin.
Navigating Web3 tides with focused insightsCompiled & Translated by TechFlow
Guest: Arthur Hayes, Co-Founder of BitMEX
Host: Natalie Brunell
Podcast Source: Natalie Brunell
Original Title: Arthur Hayes: The Fed Will Print Again — That’s When Bitcoin Explodes
Release Date: March 10, 2026
Key Takeaways
Arthur Hayes, Co-Founder of BitMEX and Chief Investment Officer of Maelstrom, joined “Coin Stories” to share his unique insights on Bitcoin, macroeconomics, AI’s disruptive impact, and the global liquidity cycle.
The core topics we discussed include:
- Why Bitcoin is dubbed the “liquidity alarm” for global markets
- How AI-driven job displacement could trigger the next financial crisis
- Why central banks may need to print more money than they did during the pandemic
- Whether institutional investors are reshaping Bitcoin’s market dynamics
- Arthur Hayes’ investment advice: Why you should wait until central banks begin printing before buying Bitcoin
Highlights of Key Insights
“Getting fired from Citibank” and entering crypto
- Being fired from Citibank in 2013 was probably the luckiest thing that ever happened to me.
- I was deeply disillusioned with mainstream finance, especially after the 2008 financial crisis—people simply couldn’t earn the same income as they had when I was in college.
- I realized two things: first, I’m not that smart; second, trading is hard to sustain profitably over the long term. If someone like me—with no technical background—could make such money, that opportunity clearly wouldn’t last.
On “institutionalization” vs. Bitcoin’s original purpose
- Some people may have already forgotten why we entered this industry in the first place. Bitcoin wasn’t created to win approval from large financial institutions.
- So why are we now going to such great lengths to gain acceptance from institutions that don’t care about our interests?
- If crypto becomes just another ordinary fintech product, what’s its appeal? Wouldn’t it be simpler to buy stocks directly through a brokerage account?
On the “liquidity alarm” and macro conditions
- Bitcoin is essentially a “liquidity alarm.” Its performance signals that there isn’t enough dollar liquidity in the market to meet various liquidity demands—explaining Bitcoin’s underperformance over the past six to nine months.
- Gold’s rally isn’t driven by “currency debasement trades,” but rather by sovereign nations increasingly recognizing rising risks in holding dollar-denominated assets.
- Holding gold is clearly safer—especially since 2022, when the U.S. and EU froze Russian assets, accelerating this trend.
On AI-triggered “Minsky moments”
- AI’s pace of advancement far outstrips the speed at which factory-line workers were displaced decades ago.
- Replacing just 10%–20% of white-collar jobs could trigger leverage effects across the banking system, sparking cascading reactions—a scenario akin to a “Minsky Moment”: panic selling erupts when markets suddenly realize certain assets are worth zero.
On “war and printing” as an investment strategy
- If someone says “war is bullish for Bitcoin,” what they really mean is “war means printing, and printing is bullish for Bitcoin.” So my advice is to wait for printing—not try to time the market.
- If I only had $1 to invest right now, I’d hold off entirely.
- The longer the war drags on, the more likely the Fed will resort to printing to prop up the situation. That’s precisely when I’ll buy Bitcoin.
On privacy and AI-driven de-anonymization threats
- The real threat will come from AI tools capable of de-anonymizing your transactions—this is the true “game-changer.”
- Feed a specific address and person into a large language model (LLM), and it can produce a high-probability match.
- If you truly need a fully anonymous electronic cash system, Bitcoin may not be the right fit.
- This is exactly why I’m very bullish on Zcash.
Psychological reassurance for investors
- Markets aren’t designed to make you money—they’re designed to take money from you.
- If you expect a life-changing return within just six months from any market or asset, that expectation is unrealistic.
- You’ll see people get rich overnight thanks to luck—but I’d bet most will lose all those gains within the next six months, continuing to gamble with risky strategies based on false confidence in replicating their windfall.
Who Is Arthur Hayes? His Legendary Story
Natalie Brunell: Hello everyone, welcome back to the show. This week, we’re joined by Arthur Hayes, CIO of Maelstrom—and an OG.
I’d like to start with your background story—it’s fascinating. I recall reading that you grew up in Michigan and later entered finance. You co-founded BitMEX, got involved with Bitcoin early on, and then embarked on an extraordinary journey. Could you share your story with us?
Arthur Hayes:
Absolutely. I was born in Buffalo, New York, spent most of my childhood in Detroit, and attended the University of Pennsylvania, where I studied undergraduate business at Wharton from 2004 to 2008. During that time, I developed a strong interest in China and took Chinese language and business courses. In 2006, I went to Hong Kong as an exchange student—I loved it so much that I secured a summer internship at Deutsche Bank’s Hong Kong branch, eventually landing a full-time role in 2008 and relocating to Asia, where I’ve lived ever since.
I’ve spent half my life in Hong Kong, Singapore, and elsewhere across Asia—never working in the U.S., and rarely returning. I spent five years in financial services: three years at Deutsche Bank as Head of ETF Market Making, when ETFs were still nascent in Asia.
Later, I moved to Citibank doing the same role. Looking back, being fired from Citibank in 2013 was probably the luckiest thing that ever happened to me. I was profoundly disillusioned with mainstream finance, especially post-2008 crisis—people simply couldn’t earn the same income as they had when I was in college.
So I felt the industry offered little room for me, and decided to try something different. At the time, I saw a Bitcoin post on Zero Hedge, read the white paper, and was deeply drawn to its philosophy. Though I had no technical background—I was a trader—I immediately asked myself: “How do I trade Bitcoin?” So I scoured forums, researched every exchange then available, trying to figure out how to go long or short, and whether derivatives existed.
Eventually, I found a small derivatives exchange run by two Russians in the Caribbean. There, I spotted an arbitrage opportunity: sell their futures contracts while buying spot Bitcoin—yielding an annualized return of 200%. So I bought my first Bitcoin on Mt. Gox, sold some futures, and a month later confirmed I’d earned the expected BTC quantity—then repeated this for several months.
By fall 2013, Mt. Gox hit issues—like delayed USD withdrawals. I tried withdrawing USD to my bank account but faced multi-week waits. Monitoring forum discussions, I noticed others faced similar problems. Though USD withdrawals stalled, BTC withdrawals remained instant—and in fall 2013, BTC premiums in China spiked to 40%, 50%, even 60%. So I used my stuck USD on Mt. Gox to buy BTC, transferred them to Chinese exchanges, settled in RMB, took buses to open Chinese bank accounts, withdrew cash, and returned to Hong Kong—exploiting the HK-China BTC price gap via arbitrage.
I made money this way—but as a trader, I realized two things: first, I’m not that smart; second, trading is hard to sustain profitably long-term. If someone like me—no technical background—could earn such returns, the opportunity clearly wouldn’t last. So I started thinking about building something more durable to stay in crypto.
That’s when I thought of derivatives. Though I couldn’t code, I decided to build my own Bitcoin derivatives exchange. I pitched the idea to contacts in Hong Kong’s circles. In 2014, we began developing BitMEX and launched our first futures contract in November that year.
Of course, our most famous product—the Perpetual Swap, launched in May 2016—is arguably the highest-volume crypto financial product ever. We earned significantly and briefly led the industry—until Binance surpassed us in 2020. Afterward, I transitioned to managing my family office, focusing on early-stage crypto investments and directional trading. Now, we’re launching a private equity fund targeting acquisitions and operational optimization of crypto companies.
Bitcoin’s Future Price Trajectory: Bullish or Bearish?
Natalie Brunell: You’ve been in crypto for years, witnessing its evolution—from the early block size wars to today’s institutional adoption. Has your outlook on Bitcoin grown more bullish over time? Some early OGs cashed out, while others grow more enthusiastic—even predicting $1 million per BTC. What’s your view?
Arthur Hayes:
I genuinely love this space—and the people here are among the most fascinating I’ve ever met. While I may be bearish or bullish on Bitcoin at certain points, I firmly believe the demand for stateless money is stronger today than it was in 2009, at the Genesis Block’s launch. So I’m thrilled to be part of this journey—whether with Bitcoin or other cryptos.
Though I may hold short-term pessimism toward Bitcoin or other assets, I remain extremely bullish on Bitcoin—and crypto overall—in the long term. In fact, aside from fitness-related activities, most of my career has been dedicated to crypto.
Are Institutions Dominating the Bitcoin Market?
Natalie Brunell: Many listeners of my show felt confused and disappointed by the last Bitcoin bull run—they didn’t see prices reach expected highs. Retail participation was actually low; institutions drove the market. What’s your take?
Arthur Hayes:
I think some people may have forgotten why we entered this industry in the first place. Bitcoin wasn’t created to win approval from large financial institutions. From zero to $66,000, Bitcoin never relied on government support, clear regulatory frameworks—or even friendly banks and regulators. It advanced despite hostile institutions. So why are we now exhausting ourselves seeking acceptance from institutions indifferent to our interests?
Our focus should be cultivating talent building new financial systems for humanity’s next era—not catering to traditional finance’s demands. I’m not saying institutions shouldn’t hold crypto—but we shouldn’t reshape crypto’s essence and mission to appease them.
Crypto’s real value lies in its transformative potential. If we blindly cater to traditional finance, crypto may devolve into just another mundane financial tool. Then people might ask: Why hold crypto at all? Buying stocks via a brokerage account would be simpler—and arguably safer. If crypto becomes just another fintech product, what’s its appeal?
Is Bitcoin’s Price Manipulated?
Natalie Brunell: Recently, there’s been heavy discussion on X about institutions manipulating and suppressing Bitcoin’s price—e.g., Jane Street, recently in the news. With your experience in derivatives, trading firms, and traditional finance, how do you view these concerns and theories?
Arthur Hayes:
I disagree with these views. Often, people post on X: “Oh, I lost money—someone else must be at fault.” That’s usually a sign of a poor trader. They say: “I made a trade, it went badly, and I saw news about some shady activity by a firm—so it must be their fault.” But that’s rarely true—the issue often lies with the trader: immature strategy, poor timing, or underestimating market complexity.
I don’t believe in some “evil conspiracy” where Jane Street or other market makers collude to suppress Bitcoin’s price. Markets operate by their own rules, with institutions participating in diverse ways. Yes, derivatives liquidity plays a key role in short-term price swings—but that doesn’t imply manipulation.
I’d caution: if you’re not a professional crypto trader, stay vigilant. Crypto markets run 24/7—meaning your phone must stay on, with alerts set. If markets swing violently at 2 a.m., your phone rings—you must wake up and act. Without that readiness, casual after-work trading is unwise—especially with leverage or short-term profit expectations.
If you’re simply buying and holding Bitcoin or other cryptos long-term, short-term volatility matters little.
What’s Hindering Bitcoin’s Development?
Natalie Brunell: What factors do you see currently hindering Bitcoin’s growth—especially as “currency debasement trades” gain wider recognition? All assets seem to be entering a gold bull market, yet we hoped Bitcoin would decouple—but it hasn’t.
Arthur Hayes:
My view is Bitcoin is effectively a “liquidity alarm.” The U.S.—particularly—faces a massive deflationary time bomb closely tied to AI’s disruptive impact on labor markets. Bitcoin and tech stocks signal a potential broad credit collapse within our highly leveraged Fed system, especially as cost-cutting enterprises replace high-income roles faster and cheaper with AI.
Bitcoin’s performance tells us there’s insufficient dollar liquidity to meet all demands—especially capex needs for hyperscalers. That explains Bitcoin’s underperformance over the past six to nine months. Nasdaq held steady, yet Bitcoin fell ~50%—while gold rose steadily.
I believe gold’s rise isn’t from “currency debasement trades,” but sovereign nations recognizing growing risks in holding dollar assets. History proves these assets aren’t fully theirs. Holding dollars means economic sovereignty rests with U.S. Treasury officials—who can dilute your holdings via bond issuance or freeze/seize them outright via sanctions. Why hold such assets with your reserves?
In contrast, gold is clearly safer—hence central banks’ continuous gold accumulation since 2008. Especially after the U.S. and EU froze Russian assets in 2022, this trend accelerated.
How AI’s Disruptive Impact Is Reshaping Markets
Natalie Brunell: Returning to your earlier AI points—you wrote an excellent piece on AI-driven deflationary shocks and white-collar job risks. You also noted private credit and broader credit markets will contract at some point, catalyzing massive Fed printing—and spiking Bitcoin.
Do you see this as imminent—or a slow, gradual process ultimately lifting Bitcoin?
Arthur Hayes:
I’m uncertain—but I suspect it’ll happen faster than most expect, due to AI’s exponential progress. Reviewing the 2008 subprime crisis: it brewed and erupted roughly seven years after China joined the WTO. China’s entry cost the U.S. ~35% of manufacturing jobs. Laid-off workers fell into poverty, sought subprime loans, and defaulted—though default rates rose only slightly into single digits, leverage effects triggered the crisis.
AI advances far faster than factory-worker layoffs did. We’ve seen firms like The Block cut 40% of staff overnight. In the U.S., flexible labor laws (“at-will employment”) prompt similar layoff talks. Once firms realize AI does work better and cheaper, they may swiftly cut 10%, 20%, or even 30% of staff.
My point isn’t that all white-collar jobs vanish—but replacing just 10%–20% suffices to trigger leverage effects and cascading reactions. This mirrors a “Minsky Moment”: panic selling erupts when markets realize certain assets are worthless. Though full effects may take two to three years, market reactions could be immediate.
We can’t predict timing—but once markets form a “collective consensus”—e.g., “AI disruption is here, white-collar layoffs are widespread”—financial stocks’ valuations may be questioned. Banks could plunge 60%–70% in days; depositors shift funds from small/midsize banks to JPMorgan or Citibank—and the Fed must intervene rapidly.
So while full impact takes two to three years, market awareness may be swift. A “collective consensus”—e.g., “AI disruption is materially affecting the economy”—could trigger massive reactions instantly.
Social Unrest and Economic Stress Impacting Crypto Markets
Natalie Brunell: Are you concerned about social impacts from these developments?
American societal division intensifies—mass discontent, escalating unrest. Politically, tribalism deepens. As unemployment rises, some seek candidates promising “free benefits.” This core frustration triggers ripple effects—yet many fail to recognize owning and accumulating hard assets like Bitcoin.
Arthur Hayes:
Indeed, social contracts between labor and capital differ globally. In the U.S., it’s fragile—capital dominates, labor rights are sidelined. Elsewhere, it’s more balanced. So yes, I foresee a deeply divisive era ahead.
Many once believed themselves wealthy—then losing jobs revealed they’d become the very people they’d scorned, dependent on government aid. How does that affect self-esteem? How do they express anger—politically, or directly, e.g., taking up arms? Some may oppose data center construction—or target tech giants like Elon Musk, Sam Altman, and Mark Zuckerberg, blaming them for destroying livelihoods and stealing the American Dream.
I can’t predict outcomes—but future societal evolution won’t be linear. It’ll be uncertain, volatile—and inevitably divisive, as America’s current social contract requires redefinition. How it changes remains unclear—but it’ll be challenging and painful.
Can Bitcoin Solve Global Affordability Issues?
Natalie Brunell: Many feel frustrated—unable to afford homes or participate in decades-long capital/wealth accumulation. Bitcoin seems an obvious solution: accumulate gradually. Yet resistance persists—surprising, given our progress.
Arthur Hayes:
I think buying some Bitcoin won’t truly solve your problems. If you earn $250,000 annually but lose your job—and face a $750,000 mortgage and $50,000/month credit card bills—Bitcoin won’t help. For long-term accumulators, it’s a great asset—and I believe its price will rise long-term. But for those who felt wealthy, then found themselves stranded, Bitcoin won’t instantly fix finances. They may realize monthly “ideal lifestyle” expenses were unsustainable.
I believe Bitcoin suits those with spare capital who recognize its potential as a solution. If you’re in a group vulnerable to AI or economic shifts, reconsider lifestyle and spending—e.g., do you need expensive gadgets, or living in high-cost cities/neighborhoods? As they say, “The first seller sells best.” Who buys your expensive home when income drops from $250,000 to $75,000? You’ll likely face major life adjustments.
Natalie Brunell: Even so—among all possible solutions or “life rafts,” aren’t options extremely limited? If someone lives paycheck-to-paycheck, faces unstable work, owns no assets, risks obsolescence—and future uncertainty looms—what can help?
Arthur Hayes:
Honestly, I’ve never experienced this—so I analyze externally. But the priority is scrutinizing living costs and cutting unnecessary expenses. Ask: What do you truly not need? Past Amazon shopping habits may shift to cheaper alternatives. Crucially, adjust finances quickly—so when crisis hits, you’re prepared and better positioned to find new paths.
What Do Bitcoin Investors Expect From Markets?
Natalie Brunell: I meet investors who entered Bitcoin only at the last bull run’s peak—$50,000 or $60,000. Now they’re frustrated—price swings, crashes, and broader crypto collapse left their investments unchanged.
They often say: “It changed nothing for me.” Sometimes I wonder: What can I tell them to re-energize their mindset and keep dollar-cost averaging into Bitcoin? For them, this investment brought no wealth transformation. They may think all opportunities passed—early entrants (pre-2017 buyers/miners) amassed BTC on modest incomes. Now, such chances seem gone. What can they accumulate now?
Arthur Hayes:
First, adjust expectations. Whether Bitcoin, stocks, or real estate—markets aren’t designed to make you money; they’re designed to take money from you. Short time horizons and high expectations breed risk-taking—even leverage—as you rush for quick gains: “I need leverage to earn faster—it’s a transformative asset.”
But have you considered how early Bitcoin winners endured? How did they feel when BTC crashed from $250 to $70 in 2013? Or from $1,300 to $135 in 2014? Most see today’s gains—but miss Bitcoin’s early volatility, 3–4x higher than now. If you bought $10,000 of BTC at $100, you might sell at $200—or dump at $99 in disappointment, failing to meet short-term price expectations.
So: Bitcoin won’t instantly rescue your finances—it shines in long-term accumulation. Like “stocks are best for long-term investing,” Bitcoin fits too. Compounding and time are capital’s most powerful forces—but time is key. Hold and consistently invest, and Bitcoin may exponentially grow your wealth.
But expecting life-changing returns in six months is unrealistic. Yes, lucky people get rich overnight—but I’d bet they’ll lose it all in the next six months, doubling down on risky strategies believing they’ll replicate fortune.
Bitcoin in China: Current Status and Future
Natalie Brunell: What’s Bitcoin adoption and investor sentiment like in your region—or places like China? Reports vary widely.
Arthur Hayes:
Actually, the Chinese government—and some local governments—still engage in Bitcoin mining. Review Bitcoin network IP data: China contributes 20%–30% of global hash rate. Why did China shut most non-government-linked mines? Primarily energy policy shifts—especially amid U.S.-Israel-Iran tensions, China avoids reliance on imported oil or hydrocarbons. The government prefers directing energy toward national long-term goals—e.g., EVs, batteries, humanoid robots—not Bitcoin mining.
This is a key reason the CCP pushed mining exit: mining consumes vast energy but delivers no direct economic benefit. Still, idle energy resources persist—enabling smaller local governments to quietly continue mining under central oversight. Thus, many large Chinese mines still operate—often linked to local or central governments.
So while China nominally bans mining, reality is more nuanced.
How Do Governments View Bitcoin?
Natalie Brunell: I suspect China may have accumulated substantial Bitcoin at the national level—perhaps why the U.S. avoids disclosing its actual holdings. Maybe this ties to U.S.-China rivalry. If China holds more BTC than the U.S., what impact would that have?
Arthur Hayes:
Possibly—but I’m unsure. Focusing on sovereign Bitcoin holdings seems meaningless. Even assuming China holds 200,000 BTC—worth billions—this pales against gold markets. And gold remains tiny versus dollar stock or real estate markets. So neither U.S. nor Chinese governments lose sleep over Bitcoin holdings—their national wealth scale dwarfs Bitcoin’s influence.
Natalie Brunell: Do you disagree with Max Kaiser’s view? He predicts a “hashrate war”—nations competing for mining power and accumulating BTC.
Arthur Hayes:
I disagree. Sovereign states don’t care much about Bitcoin. Even in the U.S., Bitcoin serves mainly as a political tool to attract voters—see Trump administration policies. Campaign promises to certain groups rarely align with enacted policies. Regardless of agreement, Bitcoin functions politically in the U.S.—a vote-getter.
In China, this is even less plausible. The government cares about RMB internationalization and using RMB in global trade—not what individuals do with Bitcoin.
Current State and Challenges of Bitcoin Adoption
Natalie Brunell: Bitcoin is transformative—it frees us from traditional finance and fiat. What’s its 5–10-year outlook? From adoption and growth perspectives, how will it evolve? Of course, “price increases” help drive adoption, right?
Arthur Hayes:
I believe price appreciation is key to driving Bitcoin adoption—price surges act like viral marketing. Why did people hear of Bitcoin? Because its 2013 surge triggered media coverage—I read articles, got curious, dug deeper. So if Bitcoin jumps from $66,000 to $500,000 in five years, it’ll attract new users and rekindle interest in its tech/potential. Such leaps are vital for adoption.
What drives this fundamentally? Liquidity. How much fiat—dollars, euros, yen, yuan—is created. As long as this continues—and I don’t foresee stopping—mathematically, expanding money supply lifts Bitcoin’s price.
Of course, volatility and path uncertainty are unavoidable. War or shocks could crash Bitcoin to $20,000 in weeks. But long-term, fractional-reserve banking forces governments to print—making this nearly irreversible. This persistent monetary expansion drives Bitcoin’s long-term price rise—and rising prices attract more users—fueling adoption.
Will Retail Investors Return to Bitcoin Markets?
Natalie Brunell: Will we see another retail-driven Bitcoin enthusiasm cycle? Institutional dominance seems entrenched—will grassroots fervor return?
Arthur Hayes:
Yes—but this time, the star may not be Bitcoin, but another crypto. Perhaps something culturally tied—NFTs or memes. Though many lost money on memes last cycle—and the hype faded—memes drove that cycle’s momentum.
New trends will emerge. I believe global central banks will keep printing to prevent street unrest amid AI’s economic/job shocks. Until we fairly distribute productivity gains, holding assets thriving in monetary excess is prudent. When that happens, retail will flood markets again—attending conferences, gatherings—the fervor will return.
Impact of Monetary Expansion on Bitcoin
Natalie Brunell: Will governments print more than during the pandemic to tackle new economic challenges?
Arthur Hayes:
Likely—because it’s exponential. Governments must print not just for current issues, but to service prior debt. U.S. Treasury debt growth follows a classic exponential curve.
So this is just beginning. Imagine AI’s power—if it truly matches hype—everyone loses jobs. That’s unlikely—but if robots/automation replace everyone, how awful? Banking systems may collapse—forcing massive printing.
I don’t expect this extreme—but it’s a useful model to imagine AI’s potential consequences.
Career Development in the AI Era: Opportunities and Challenges
Natalie Brunell: If you just graduated college and wanted maximum wealth accumulation, what would you do?
Arthur Hayes:
Start a podcast. Computers do much—but inputs still come from human dialogue/text. AI needs new experiences, human inputs, to predict and serve us. So those driving conversations and creating fresh, unique content will be most valuable in the post-AI world. Whatever your skill—writing, singing, dancing, or other creative forms—these are AI’s unmet needs and its learning fuel.
Natalie Brunell: Many fear AI is replacing creative jobs. I see AI-generated videos indistinguishable from reality—virtual personas sometimes impossible to differentiate. Won’t distinguishing reality from virtual become harder?
Arthur Hayes:
Yes—it’s why people buy Worldcoin or develop sovereign identity tech—e.g., “human verification.” These may become standards, though specifics remain unclear—a long-studied problem.
Think: prompts like “generate something like this” reference real people/bands/content. AI mimics. So strive to be the person AI wants to mimic in every way.
Natalie Brunell: What’s your favorite AI tool? Do you use them often?
Arthur Hayes:
I’ve recently adopted Perplexity’s tools—they’re exceptionally powerful, like intelligent task orchestration platforms. Friends bought Mac Minis, installed Clawbot or similar, diving deep into AI implementation—but I lack time or interest in technical details. Perplexity handles parallel tasks and leverages AI Agents. I foresee a trend: people like me won’t coordinate multiple AI Agents manually—we’ll pay companies like Perplexity for simplified tools. I use it for research and chart generation—it’s incredibly convenient.
Natalie Brunell: Have you seen the recent article by an Anthropic researcher who quit, claiming human society is doomed—and moved to London? Do you worry about AI’s negative impacts or pessimists’ dark forecasts?
Arthur Hayes:
Possibly—but life’s too short to obsess over this. I don’t know if the future will be good or bad. Sci-fi novels depict both. Whatever happens is inevitable—so I won’t stress.
Maelstrom Fund: How It Impacts Crypto Markets
Natalie Brunell: Tell us about your work. As CIO of Maelstrom Fund, what do you do? What’s the company’s business?
Arthur Hayes:
I co-founded Maelstrom with my partner Akshat—he worked for me at BitMEX, and we launched the firm in 2013. Honestly, I’m not great at early-stage investing—I lose patience easily. We have no LPs, so we ignore external opinions—focusing on profitable opportunities and technically sophisticated trades, entering quality projects early.
Initially, we wrote small checks—$50,000 to $250,000—for early projects. We launched perfectly—timing ideal for investing in high-performing “shitcoins.” Etherfi, for example, began as an Ethereum staking provider, evolved into a novel bank—we’re now advisors. We advise Pendle and Athena too. Athena originated as my protocol idea, implemented by Guy Young’s team—now the third-largest stablecoin protocol.
We performed exceptionally early on. Later, we shifted to advisory services—which explains my frequent podcast/conference appearances, sharing updates and token picks. Advisory fees are usually paid in tokens—we believe in their future upside.
We also entered liquidity trading. I hired a colleague who worked with me at BitMEX and Deutsche Bank—we now focus on crypto directional and volatility trading, mostly long, rarely short.
Recently, we expanded into private equity. We found excellent crypto firms—e.g., data availability and API connectivity providers supporting trading, attracting heavy capital inflows and high margins. Often founded by non-U.S. nationals, they’re undervalued. Founders, seasoned in the industry, may wish partial exits. We step in—provide large capital, acquire firms, replace management, bring in new ops teams, lift P/E ratios, then IPO or sell to financial institutions seeking quality assets. We’re currently fundraising for this fund.
Regulation, Privacy, and Quantum Computing Threats
Natalie Brunell: Lately, crypto faces increasing regulatory scrutiny—especially AML/KYC rules and crackdowns on privacy tools. Will this tension persist? Bitcoin’s peer-to-peer nature clashes with fears of institutionalization and corporate control—how will this evolve?
Arthur Hayes:
Undoubtedly, Bitcoin embodies this conflict—many fear corporations imposing absurd KYC/AML, eroding privacy. Concerns are valid—but implementation may differ. The real threat comes from AI tools de-anonymizing transactions—the true “game-changer.”
No complex new regulations needed—just feed an address and person into an LLM for a high-probability match. This tech exists today—accuracy may be imperfect, but it’s happening.
That’s why I’m bullish on Zcash—essentially a privacy-focused Bitcoin version, built on Bitcoin’s code but adding zero-knowledge proofs. If you need fully anonymous e-cash, Bitcoin may not suffice. Core developers won’t add such features—but Zcash was designed for this. If you fear AI + big-tech data + government data control, privacy coins like Zcash or Monero may suit you better.
Natalie Brunell: What’s your view on quantum computing’s potential threat?
Arthur Hayes:
I’m not overly worried. I’ve discussed this repeatedly with Johnny Beer of BitMEX Research. Bitcoin Improvement Proposals (BIPs) already outline methods to secure Bitcoin in the post-quantum era.
If quantum computing worries you, solutions exist—e.g., using latest Bitcoin address types. Send BTC to these addresses and use them once—your BTC stays safe.
However, if you still use 2009-era addresses, quantum computing may pose risks once mature—since quantum computers could derive private keys from public keys and transaction records. Overall, I don’t see this as imminent. The community actively researches solutions—and proposals exist to adapt Bitcoin for the post-quantum era.
Generally, quantum computing concerns are mostly FUD. Every few years, “quantum panic” resurfaces—e.g., “I won’t buy Bitcoin—it’ll be cracked by quantum computing.” But solutions exist—they just need time to deploy. So I’m not particularly concerned.
Will Institutions Drive a Bitcoin Fork?
Natalie Brunell: Some predict Bitcoin may face another split like the block size wars—but this time, driven institutionally. E.g., a “BlackRock Chain” could fork Bitcoin. Could this happen? What would it look like?
Arthur Hayes:
It’s possible—if BlackRock controlled 30% of hash rate. But realistically, BlackRock is no different from us—they’re just Bitcoin holders. Their core business is asset management: accepting client assets, custody, and charging fees.
Yet real influence on Bitcoin comes from miners, node operators, and other ecosystem participants—not BlackRock. So a “BlackRock Chain” lacks practical feasibility—unless they buy ASIC miners and start mining. If you describe such a future, we can discuss “BlackRock-driven hard forks.” Otherwise, it’s meaningless.
Has Bitcoin’s Price Bottomed?
Natalie Brunell: Final question: Has Bitcoin’s price bottomed?
Arthur Hayes:
I’m unsure. I recently wrote about U.S.-Iran war tensions—suggesting prolonged conflict could trigger massive equity selloffs and further Bitcoin declines—potentially below $60,000—sparking cascading liquidations. So if I had just $1 to invest now, I’d hold off—not buy Bitcoin yet.
My view: The longer the conflict lasts, the more likely the Fed will print to support the U.S. war machine. And when central banks print—that’s when I’ll buy Bitcoin. We’re already seeing signs—e.g., Trump potentially deploying ground troops or signaling indefinite war duration. Longer conflict = greater Fed printing likelihood. Throughout my life, major Middle East wars consistently triggered such responses.
So if someone says “war is bullish for Bitcoin,” they really mean “war means printing—and printing is bullish for Bitcoin.” My advice: Wait for printing—don’t try to time the market. You might misjudge. News reports often reflect mainstream media narratives—what authorities want heard—not necessarily reality. So watch what they *do*, not just what they *say*.
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Arthur Hayes
