Former BitMEX CEO Arthur Hayes believes Bitcoin could reach $1 million during Donald Trump's presidency. His latest blog post "KISS of Death" outlines how a recession followed by monetary stimulus might propel cryptocurrency markets to new heights.
Hayes argues investors should focus on liquidity rather than headlines. "One day, you buy and then quickly sell after digesting the next headline," he warns. "The market chops you in the process, and your stack quickly diminishes." His framework centers on the "KISS" principle—Keep It Simple, Stupid—emphasizing that the quantity and price of money ultimately drive asset prices.
The crypto executive expects Trump to finance his "America First" agenda through debt. Unlike Herbert Hoover's Treasury Secretary Andrew Mellon, who advocated liquidating assets during economic downturns, Hayes believes Trump will pursue looser credit conditions. "Trump wants to be considered the greatest President ever," Hayes writes.
Trump's newly formed Department of Government Efficiency, led by Elon Musk, could trigger economic contraction through aggressive spending cuts. Hayes notes that DOGE claims Social Security payments to deceased individuals may cost hundreds of billions annually. "Trump and DOGE are firing hundreds of thousands of government employees," he states, citing rising unemployment claims in Washington, D.C.
Such drastic budget cuts could force Federal Reserve Chair Jerome Powell to implement monetary stimulus to prevent financial crisis. Hayes predicts Powell will have little choice but to cut rates and potentially restart quantitative easing. He estimates these policy shifts could inject $2.74 to $3.24 trillion in new liquidity.
Hayes calculates that dropping the Federal Funds Rate from 4.25% to 0% might equal approximately $1.7 trillion in money printing. Ending quantitative tightening could add another $540 billion, while additional Treasury purchases might contribute up to $1 trillion more. This compares to the $4 trillion in pandemic-era stimulus that helped Bitcoin surge 24x from its 2020 lows.
Despite his bullish long-term outlook, Hayes expects immediate turbulence for Bitcoin. "I firmly believe we are still in a bull cycle, and as such, the bottom at worst will be the previous cycle's all-time high of $70,000," he writes. He points to Bitcoin's recent movement—rising to $110,000 in mid-January before pulling back to $78,000 in late February—as evidence of looming liquidity problems.
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.