Arthur Hayes' latest ten-thousand-word interview: Autumn correction, ETH long-term sees 10,000 to 20,000 USD

OdailyNews

2025-08-22 22:40:11

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"Everyone is looking forward to tonight's Jackson Hole summit, but Powell is likely to steal the show."

Original Title: Powell Is About To F*CK Crypto Over At Jackson Hole! [Arthur Hayes]

Original Source: Crypto Banter

Original Compilation: Azuma, Odaily Planet Daily

Editor’s Note: The industry expert who loves to predict market trends, BitMEX co-founder Arthur Hayes, is back with his market outlook. During a podcast discussion on Crypto Banter early this morning, Arthur Hayes shared his insights on potential interest rate cuts, ETH trends, and altcoin selections.

Below is the full content of Arthur Hayes' podcast discussion, compiled by Odaily Planet Daily, with some content omitted for readability.

Powell, Interest Rate Cuts, and Market Trends for the Second Half of the Year

Host: I saw some of your tweets before, especially the one on August 2: "The tariff bill will take effect in the third quarter, and at least the market believes that no major economy can quickly create enough credit to boost nominal GDP ------ Bitcoin will test $100,000, and Ethereum will test $3,000…" Can you elaborate on your views on the market trends for the second half of the year? I think Powell must cut rates in September; he seems to be under a lot of pressure. What do you think?

Arthur Hayes: I don’t think Powell must do anything. I’ve discussed this with many macro strategists, and they’ve given all sorts of reasons. Of course, some will talk about the labor market; others will say the U.S. may already be in a recession or will soon be in one; some will say tariffs will disrupt everything… I understand all this noise, but humans are strange. At some odd junctures, people suddenly decide to have "principles," to have "self-respect" and "face."

If Powell really thinks of himself as "Volcker 2.0," what could prove him more than resisting Trump's pressure? For example, not cutting rates and insisting on serving his term until May 2026 instead of resigning early. This is entirely possible. In that case, there could be a situation where Powell overstays his term, coupled with a bunch of Democratic appointees obstructing Trump's policies. I don’t know the probability of this happening, but almost no one in the market has seriously considered it.

Of course, this doesn’t mean the Trump administration can’t find ways to "print money." If the government really wants to print money, it can always find a way. So I’m just warning of the risks; I can’t give probabilities.

Clearly, I think we are entering a "gray area." Friday is the Jackson Hole summit, and Powell will be speaking. Everyone is looking forward to whether he will reveal the direction for September: will there be a rate cut? Or is the rate still not tight enough, or even possibly higher? No one knows what he will say. The Treasury is still issuing bonds, and the reverse repo balance has been zeroed out. The market opened weak this week; for example, ETH dropped 10%, so I think this is an uncertain phase.

Will the market at the end of the year be higher than it is now? I believe it will. If you’re not leveraged, you really don’t need to care; maybe it will drop another 15%-20% this week, and if you have spare cash, it will be a good opportunity to buy the dip. I believe there will definitely be "money printing" before the end of the year. Bitcoin could surge to $250,000, and ETH could exceed $10,000. But before that, the fall may be quite volatile.

Host: I agree with most of your points, which aligns with our judgment. There might be a pullback before the end of the year, and then we’ll see the real bull market peak. I will look at the data: CPI below expectations, PPI above expectations, employment data being revised… Now the market gives an 83% probability that rates will be cut. I think your point about Powell being a person of "principle" has some merit, but I still tend to believe he will cut rates in September unless something unexpected happens.

Arthur Hayes: Why is cutting rates the "right choice"? The data from the Bureau of Labor Statistics (BLS) is garbage, completely manipulated by partisanship. CPI is also garbage; statistical models can be manipulated at will. Since Trump took office, the BLS director has been replaced, and this agency will eventually become his megaphone, so Powell can easily say, "These data are unclear; we need more time and will temporarily maintain the rate at 4.5%."

I’m just reminding everyone from another angle: don’t pin your hopes on so-called "data." Back in 2022, everyone said the data pointed to a recession, and Powell had to cut rates, but he directly raised rates by 75 basis points, hitting the market hard. So we could very well replay the situation of 2022 ------ the market expects a rate cut, but Powell suddenly delivers a "hawkish punch," resulting in a market crash.

Host: Okay, but I think there will be at least a 25 basis point cut in September, even if it’s just because he’s tired of the external criticism.

Arthur Hayes: Are you sure? If he really wants to be "Volcker 2.0," then this is precisely the opportunity to prove himself ------ resisting the president's overreach and maintaining the independence of the Federal Reserve.

Host: So what’s your baseline judgment? Do you think there will be no rate cuts this year? Or one or two cuts? What’s your baseline prediction?

Arthur Hayes: My baseline judgment is ------ I have no idea. I won’t go heavy on these false data points and get myself trapped. You can interpret these data from different angles, but they are all unreliable. I just feel that the market is expecting Powell to cut rates, but no one is seriously considering the possibility of "Powell standing firm on principles" and directly telling Trump "screw you," maintaining no rate cuts in an election year.

Do you remember when Kamala Harris was campaigning? The labor market was good, unemployment was low, inflation was above target, but the Fed still cut rates by 50 basis points to help her. There were even Fed officials who openly said, "The Fed will do everything possible to prevent Trump from being elected." Although it wasn’t Powell who said it directly, other board members have made clear statements. So now a similar situation could arise: the market calculates an 83% probability of a rate cut based on the data, but Powell might be thinking, "The Fed is above partisan politics, so we won’t cut rates."

I’m not saying this will definitely happen; I’m just reminding you that it’s a possibility. I personally won’t trade based on the assumption of "the Fed cutting rates by 50 basis points." Because even if Powell doesn’t cut, the Trump administration has many other ways to stimulate the market. So there might be short-term pain, but this could instead push the Trump administration to use more aggressive and "unconventional" means to print money and advance their economic agenda.

Host: So your baseline judgment is: they will definitely find a way to "print money" before the end of the year?

Arthur Hayes: Exactly. They will definitely do something. I don’t know which specific method they will use, but I’m very sure that if Powell insists on not cutting rates, the government will definitely find a way to "squeeze out liquidity."

Short-term and Long-term Price Predictions for ETH

Host: Okay, you previously said ETH would test $3,000. Do you think ETH will reach $3,000 first and then break its all-time high?

Arthur Hayes: I don’t think so. When I said ETH would test $3,000, it was before it broke $4,000. Later, Jane and I bought back some ETH. From a chart analysis perspective, it definitely has more room to rise; we can’t go against the market.

If Powell gives a hawkish speech at Jackson Hole, I think ETH might first retest $4,000.

Host: In this cycle, Bitcoin's price has exceeded its previous high by about 70%, while ETH is still struggling to break its previous high. Do you think ETH will experience a similar catch-up rally, rising above its previous high by 70%, reaching $5,000, $6,000, or even $7,000?

Arthur Hayes: I believe ETH will reach $10,000 -- $20,000. Once it breaks its all-time high, the upside potential will be fully opened. Moreover, digital asset treasury companies are continuously raising funds; if the assets they purchase are constantly hitting new highs, the fundraising process will be easier, and prices will continue to push upward.

This mainly depends on how much these companies can raise and how much the government will print. I’m not the type to stick to a "four-year cycle." How long this cycle lasts depends on how they play it.

The Trump administration hasn’t fully entered the "money printing rhythm" yet. They are still paving the way, testing various methods to see which one works. They are sending signals of "we want to heat up the economy," throwing out various ideas to see what can be implemented. Once the candidates for the Fed chair and board members are determined, such as whether Trump can fire Powell and install his own people ------ this may not become clear until mid-next year.

Once that is determined, for the rest of the period from mid-2026 until the end of Trump’s term, they will print money like crazy. Because without printing money, you can’t win elections. The Democrats need to print money, and the Republicans have to print money too. Otherwise, his supporters and allies won’t benefit, and how can he get re-elected?

Host: So you think this bull market could be extended for a long time. In other words, the traditional four-year cycle theory will fail. Trump’s money printing may start a bit slowly, but once the policy fully kicks in, this cycle could extend to 2027 or 2028?

Arthur Hayes: Exactly.

Host: Wow, that’s really amazing. When you say ETH can reach $10,000 -- $20,000, you mean not this year, but in the next three to four years, right?

Arthur Hayes: Yes. But my baseline judgment is, we will definitely have a major bull market, and all financial assets linked to Trump’s policies will benefit. Because he must win the election in 2026. The only thing voters care about is their wallets: am I richer today than I was yesterday? If not, I’ll vote for someone else. So they chose Trump over Biden; the same logic will apply to the 2026 congressional elections and the 2028 presidential elections.

The Democrats will also clearly shout "we need to print money," and if the Republicans don’t provide benefits, they will lose votes. So both sides will be desperate to flood the market with liquidity.

Host: Haha, you’re almost making me want to vote for the Democrats. If they’re going to distribute money, I only care about the money anyway.

Arthur Hayes: Right, in the end, it’s all about money; partisanship doesn’t matter.

ETH vs SOL

*Host: ETH has recently captured Wall Street's big narrative; everything seems like a perfect chain reaction. First, Circle went public, which was much better than expected, drawing attention to stablecoins; then, the stablecoin narrative naturally fell on ETH; next, Joseph Lubin and Tom Lee both loudly called for more ETH; as a result, ETH became Wall Street's new darling. It has become the platform for "real-world assets." Moreover, ETH now has prominent leaders, whom I call "Batman and Superman" ------ Lubin and Tom Lee, one speaks on CNBC every day, and the other is a founding elder of ETH… My question is: if you could only put your money into one asset between now and the end of this cycle, would you choose SOL or ETH? Because until two months ago, everyone was bearish on ETH, almost unanimously supporting SOL. Now it suddenly seems to be all about ETH. *

Arthur Hayes: To be honest, both will rise. The question is just which one rises more. I am an advisor for the Solana project, so I certainly believe SOL will rise, but ETH is a larger asset with faster inflow of funds. SOL and ETH will be an interesting competition; one side may rise faster, but that doesn’t mean the other side will lose; they will both go up.

Host: From a position allocation perspective, would you be more heavily weighted in ETH?

Arthur Hayes: Yes, I would lean more towards ETH.

Investment Logic and Collapse Risks of Crypto Treasury Companies

Host: The shift in Wall Street's attitude is indeed astonishing. What do you think about these "crypto treasury companies"? Some people hesitate about whether to hold ETH directly or buy stocks of these companies, like SBET or BMR, which sometimes trade at 1.8 times or even 2 times their net asset value. Would you recommend crypto investors buy these stocks?

Arthur Hayes: The trading logic is simple; you are essentially spending $2 to buy $1 worth of assets because you believe in the power of passive index funds. For example, I just had a meeting with the team at UPXI (a Solana treasury company), and I told them to study which indices might include their stocks, what mandatory buying rules fund managers have, and that average trading volume, market capitalization, and listing exchanges must meet standards.

As long as these conditions are met, fund managers must buy your stock, regardless of what the company is actually doing. This is the MicroStrategy model, pioneered by Michael Saylor. They force funds to flow in by entering various indices.

Host: Doesn’t this create leverage risks in the market? For example, you have $1 worth of ETH, but it’s inflated to $2 in some companies. There’s $1 of "air" in between. In Michael Saylor’s case, he initially used money from bonds and convertible bonds to buy Bitcoin, which could generate returns for shareholders while repaying the bondholders. But now, most new treasury companies have learned the lesson; they all say, "We don’t want leverage," because Michael Saylor has proven that debt can be called back, while different categories of stocks won’t have this risk. So I’m confused about why one would spend $2 to buy $1 worth of assets. I find it hard to find a reasonable explanation.

Arthur Hayes: The answer is simple: because you believe it will enter an index. Passive fund managers don’t care about price, don’t care about net worth; the system requires them to buy, so they must buy. They must have all the stocks bought before the market closes. Whether it’s $1 or $50,000, they don’t care.

Host: I understand, but I still think this is risky. For example, if one day the market crashes, and these companies’ stock prices drop from 2 times net value to below net value, no one will buy them anymore. At that point, they will lose their meaning of existence and can only sell off their underlying assets, leading to a "de-leveraging collapse" in the crypto market.

Arthur Hayes: (A collapse) is theoretically possible, but in practice, it’s not that easy. Because these are not ETFs; they are companies. If the company management wants to "hold firm," you must first buy enough shares, hold a shareholders' meeting, and force them to liquidate. This process is very expensive and time-consuming, possibly taking years, and may involve lawsuits.

So I’m not too worried about the so-called "chain reaction collapse." Unlike ETFs that can be redeemed the same day, treasury companies are more complex.

Host: But do you agree that by the end of this cycle, there will be many opportunities to buy these companies at very low prices, just like when Grayscale was trading at a 50% discount?

Arthur Hayes: Yes, but at that time, you will have to spend a long time and a lot of costs to truly realize the arbitrage.

Host: What I worry about is that not every team is Michael Saylor. When some companies can’t hold on anymore and start liquidating their crypto assets, that will be the end of this cycle.

Arthur Hayes: I agree. At that time, some treasury companies may be acquired at a discount to net value or directly liquidate assets. Those leading projects will passively absorb capital, while the laggards will be eliminated.

Host: Which assets do you think will catch Wall Street's eye and are worth setting up treasury companies? Clearly, BTC, ETJ, and SOL have potential. I’ve also seen treasury companies around BNB, TON, HYPE, and ENA. How far do you think this trend will develop? Will it cover the top 100 tokens? Or the top 20 tokens? How interested do you think Wall Street is in cryptocurrencies right now?

Arthur Hayes: As long as the market continues to rise ------ I don’t know how much the bankers specifically take from these trades, but sponsors definitely take 3%, 4%, or 5% ------ this is excellent business for investment banks. As long as there is profit to be made, they will build treasury companies for all assets.

Selection and Logic of Altcoins

Host: Let’s talk about altcoins. The last time I saw you during Dubai 2049, you told me to buy ETHFI, and it ended up buying me a new house and paying for my child's tuition. So what altcoins are you looking at now? For example, Ethena (ENA), are you still very optimistic about it? Their stablecoin issuance has doubled, from $6 billion to $12 billion, and as market rates rise, the protocol's yield has also recovered. It seems this project has done many things right.

Arthur Hayes: Yes. I have a macro logic regarding stablecoins, and I will be speaking at WebX in Japan next week, where I will also publish an article. My point is, people’s imagination about stablecoins is still not big enough. U.S. Treasury Secretary Yellen will use stablecoins to reverse the trend of "de-dollarization" ------ that is, to bring back the global offshore dollar flow to the U.S., while providing banking services to so-called "global south countries" (mainly developing countries located in Asia, Africa, and Latin America), even if local regulations do not allow it.

Stablecoin issuers need to make money from interest rate spreads, so they will use users' funds to buy U.S. Treasuries. Suppose by 2028, the circulation of dollar stablecoins reaches $10 trillion; what does that mean? I will elaborate on this part in the article.

Ethena's model is to package the "funding spread" in the crypto market into a stablecoin that comes with yield. Essentially, you are lending money to speculators (those going long) and earning interest. This trading model has existed in the crypto market for over a decade; it’s just that the Ethena team has packaged it as a DeFi product, making it easy for everyone to participate.

So I believe Ethena can earn hundreds of millions of dollars in interest income through this path each year. Once they start buying back tokens, and ETH is surging, the price of ENA will definitely skyrocket. My prediction is that Ethena will surpass Circle in the next 12 months, becoming the second-largest stablecoin after Tether.

Host: That’s a bold prediction, and I agree with your analysis. Let me ask you this: in reality, there will be a bunch of stablecoins, like PayPal USD, USDT, USDC, Ethena, and Stripe's stablecoin. Why would people keep swapping between them? In what scenarios would you exchange USDT for USDC or for PayPal USD?

Arthur Hayes: Actually, the key is not the exchange but the distribution. Social media platforms are the "tip of the spear"; who will open accounts for those who have not yet accessed dollars? The answer is Facebook (Meta) and X (Musk's Twitter), which will launch wallets. At that time, which stablecoin gets chosen will depend on the distribution capabilities of these platforms.

Host: You didn’t mention Telegram? It has a billion users.

Arthur Hayes: The chain on Telegram seems a bit fake to me, with no real activity and legal troubles. I don’t think the U.S. government will hand over the distribution rights of "dollar policy" to Telegram. It’s more likely to be given to capitalists like Musk and Zuckerberg, who pay taxes, donate, and are controlled.

For example, Filipinos want to use dollars, but local regulations don’t allow Citibank or JPMorgan to serve them directly. The Trump administration could support WhatsApp to launch "USDT payments," allowing Filipinos to receive dollar remittances directly through WhatsApp. This kind of "dollarization" cannot be stopped.

Once everyone has stablecoins, the next step is to spend them. For instance, buying coffee at 7-11 or swiping cards at convenience stores. Domestic bank cards may not work well overseas, but Ether.fi is very useful. I have the Etherfi app on my iPhone and a physical card that I can swipe anywhere. Once hundreds of millions or even billions of people get dollar stablecoins through Facebook and X, they will also need spending scenarios. Ether.fi can meet this demand and allow them to spend stablecoins.

Host: Okay, what about Hyperliquid? What’s your logic there?

Arthur Hayes: I believe Hyperliquid will become the largest exchange in the world, surpassing Binance. Because once stablecoins become widespread, a large number of new users will enter, and their only way to combat inflation will be speculation, with on-chain derivatives exchanges being the place to speculate. Hyperliquid offers low-cost, high-liquidity contracts and buys back 97% of profits, directly returning them to users.

For example, when a project wants to go public, it usually has to pay 7%-10% of tokens to centralized exchanges (like Binance) as listing fees, but on Hyperliquid, it costs almost nothing and provides immediate liquidity. This way, project teams have no need to "give away" tokens to centralized exchanges. Consequently, Hyperliquid will gradually dominate the new issuance market.

Host: I understand. In the past, to earn more returns, I would invest in some very small altcoins, but this time I choose to focus on leading projects, like ENA and LINK, and then add a bit of leverage. I think this way has a better risk-reward ratio.

Arthur Hayes: Right, I’m now only investing in projects that can bring real cash flow. I no longer pursue thousand-fold returns because that means enduring a bunch of projects going to zero; I just want to hold on comfortably after big funds come in. For example, Hyperliquid buys back 97% of its profits, EtherFi has already started buying back, and Ethena will soon launch its buyback. The profits from these protocols will be directly distributed to us token holders, rather than being intercepted by the protocol teams.

Host: I agree with your logic. What about Chainlink? Recently, it has suddenly become a new darling on Wall Street; is it on your radar?

Arthur Hayes: To be honest, I’m not paying much attention. I haven’t deeply researched or understood whether their current positioning is still just about being an oracle.

NFTs and CryptoPunks

Host: Okay, before I let you go, I have to tell you that I finally bought a CryptoPunk. Even though I said before that "I will never buy one," when you and Raoul Pal were discussing how CryptoPunks would outperform ETH, I couldn’t help but buy one. Do you still have a positive outlook on it?

Arthur Hayes: Of course. Because everything humans do, aside from survival essentials, is an "identity game." In reality, symbols of identity are artworks, luxury cars, and big houses; online, symbols of identity are these scarce, story-laden digital collectibles. CryptoPunks is the most representative NFT project, and its status is irreplaceable. So I must hold CryptoPunks; it will always be the "first," and CryptoPunks has great liquidity, being the most marketable series in NFTs.

When ETH rises to $20,000, many wealthy people will need to flaunt their identity. They might not show off designer belts but will say, "Look, I have a CryptoPunk, a pixel avatar I bought for millions." This is the new symbol of identity.

……

The subsequent discussion is about personal life and small talk, which will not be translated here. If interested, you can watch the original video directly.

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