Former cryptocurrency exchange executive Arthur Hayes predicts Bitcoin will reach $1 million by 2028, citing U.S. Treasury actions and geopolitical tensions as primary drivers rather than Federal Reserve policies. Hayes argues that Treasury Secretary Scott Bessent's strategies to manage U.S. debt are creating significant market liquidity that will benefit cryptocurrency values.
What to Know:
- Hayes believes Treasury Department actions are more important to Bitcoin's future than Federal Reserve policies
- He predicts U.S.-China trade negotiations will result in superficial agreements that maintain status quo
- Hayes maintains a portfolio heavily weighted toward Bitcoin (60-65%) based on his market thesis
Treasury Department Actions Outweigh Federal Reserve Policy, Hayes Claims
Arthur Hayes wants cryptocurrency investors fixated on Federal Reserve policy to redirect their attention as the United States and China navigate toward a potential trade agreement. "The real show is at the Treasury Department. Ignore the Fed. It doesn't matter," Hayes told CoinDesk in a recent interview. The outspoken crypto advocate dismissed the central bank's relevance regardless of political administration, stating, "Powell didn't matter in 2022 under a Democratic regime, and he doesn't matter now under a Republican one."
Hayes argues that the Federal Reserve has become increasingly irrelevant while Treasury Secretary Scott Bessent quietly reshapes global liquidity through strategic buybacks and auction strategies designed to manage America's growing debt burden. These liquidity-generating measures, combined with what Hayes describes as America's unchecked spending, form the foundation of his bold Bitcoin price prediction.
"All we care about is whether there are more dollars in the system today than yesterday," Hayes said. "That's all that matters."
The cryptocurrency market's trajectory isn't solely determined by monetary policy, according to Hayes. Geopolitical tensions, particularly what he characterizes as performative trade diplomacy between the United States and China, create additional catalysts for cryptocurrency growth. Hayes anticipates both nations will ultimately sign an agreement that appears substantial but preserves existing economic relationships.
"It's going to be a deal on the surface," he said. "Trump needs to prove he's been tough on China. Xi needs to prove that he stood up to the white man."
Capital Controls and Investment Taxes Likely Next Moves
Hayes believes China has demonstrated through its COVID-era policies an ability to withstand significant economic hardship. With tariffs remaining politically sensitive, Hayes predicts American policymakers will implement taxes on foreign investment—a subtle form of capital control intended to reduce dependence on international buyers without alarming domestic constituents.
"The only real policy that actually works is capital controls," Hayes said.
The potential policy toolkit extends beyond taxes on foreign-held Treasury securities or equities, according to Hayes. More aggressive measures could include forced bond exchanges, replacing 10-year notes with 100-year instruments, or increased withholding taxes on capital gains from American assets.
These strategies aim to rebalance financial accounts without requiring Americans to reduce consumption—a politically unpopular position.
"Americans don't like to do hard things," Hayes added. "They don't want to be told that you have to consume less."
Despite rhetoric suggesting otherwise, Hayes maintains China cannot realistically divest from American markets. "They have to obfuscate kind of how much stuff they're buying off of America... but mathematically, they just can't stop," he said.
For Hayes, these economic conditions ultimately benefit cryptocurrency markets, particularly Bitcoin, which he believes will absorb excess liquidity. His investment approach reflects this conviction, with 60 to 65 percent allocated to Bitcoin, 20 percent to Ethereum, and remaining funds in what he describes as "quality shitcoins."
The cryptocurrency market has evolved to prioritize utility over speculation, according to Hayes. "We are in fundamentals season. People are tired of coins that don't do anything," he said.
The Bottom Line
Hayes remains firmly convinced that Treasury Department policies and U.S.-China economic tensions will drive unprecedented Bitcoin growth, reaching $1 million by 2028, while investors increasingly favor cryptocurrencies with demonstrated utility over purely speculative tokens.