In his latest blog post, entitled “Kiss of Death”, former general director of Bitmex, Arthur Hayes, presents a provocative thesis about the trajectory of Bitcoin and wider financial markets under the re -presidency of Donald Trump. Hayes-which has long had stubborn views on cryptocurrency-arguments that the convergence of fiscal and monetary policy could catapult the price of Bitcoin to even $ 1 million in the era of Trump, but only after a period of confusion based on recession.

Breaking Bitcoin’s “Kiss of Death”

Hayes structure It rotates around the “kiss” principle – relying on uncomplicated, stupid – and to those market participants to focus on the basic motorcycle motor of the asset: liquidity. Instead of reacting excessively to sensational headers, he claims that you should be careful about changes in the quantity and price of money (i.e. how much loan is created and at what interest rate).

“One day you buy and then quickly sell after digestion of the next header,” warns Hayes. “The market cut you during and your pile decreases quickly.” He recommends sticking to simpler perspectives: if the US government prints significant amounts of money at lower rates, risk assets such as Bitcoin may boost.

The key premise for Hayes’s analysis is that President Trump, “Showman real estate” according to the background, will finance his program “America First”, not a sacrifice of savings. Hayes contrasts Trump with Andrew Mellon – secretary for places within Herbert Hoover – who once said: “Eliminate work, eliminate wrestling, eliminate farmers, eliminate real estate. It will clean the thinness from the system. “

Hayes claims that such a position was a political suicide for the president who wants to be seen as Franklin D. Roosevelt from the 21st century than Hoover. As Hayes put it, “Trump wants to be considered the greatest president in history,” and therefore is willing to relax credit conditions, not their strengthening.

Hayes emphasizes the unconventional maneuver of Trump, which reduced federal expenses and potentially triggers the recession, thus forcing the federal reserve to respond to rate reductions and fresh liquidity. The newly created Department of Government Efficiency (DOGE), headed by thunderous entrepreneur Elon Musk, is presented as an aggressive effort to disclose fraud and restrictions on waste in government programs.

Hayes cites Doge claims that social insurance payments can go to dead people or unverified identities, allegedly costing hundreds of billions – and even a trillion – next year. “Trump and Doge are shooting hundreds of thousands of government employees,” notes Hayes, referring to media reports, citing increased unemployed claims in Washington.

By crossing the federal budgets so drastically and so quickly, Trump could – in Hayes’ words – “cause a recession or convince the market that it is right around the corner.”

When there are signs of recession, Hayes predicts that the chairman of the Federal Reserve Jerome Powell will have no other choice but to reduce the rates, end quantitative closet (QT) and potentially restart the quantitative alleviation (QE) to avoid the universal financial crisis. Powell, whom Hayes calls the “traitor of trading” (reference to an earlier reduction of the FED rate during the Kamala Harris campaign), is, however, associated with the Fed mandate to maintain economic stability.

Hayes points to $ 2.08 trillion of corporate debt in the USA and $ 10 trillion dollars of the tax debt in the US, which must move in 2025, if the economy releases, throwing this debt at high percentage rates becomes impossible. In this scenario, the only Fed salvation is to create fresh money and lower rates.

Hayes calculates that the full Fed reaction – containing several shifts of the principles – can result in 2.74 to 3.24 trillion USD in a novel liquidity: lowering the rate of federal funds from 4.25% to 0% can be equivalent from around USD 1.7 trillion USD printing money, according to Hayes’s estimates.

Currently, the Fed runs $ 60 billion per month in QT. If QT ends by April 2025, Hayes sees a liquidity injection of $ 540 billion in relation to previous expectations. Additional tax purchases by commercial banks Fed or the USA (the latter supported by relaxing an additional lever indicator) can add another 500 billion to $ 1 trillion.

He compares this with $ 4 trillion stimulus during the Covid-19 pandemic. Considering that Bitcoin has jumped about 24 times from minima 2020 to 2021 in response to this wave of liquidity, Hayes claims that there may be a more conservative 10x multiple. “For those who ask how we reach $ 1 million in Bitcoin during the presidency of Trump, yes,” announces, combining huge creation of loans with a acute BTC price.

Despite his stubborn long -term forecast, Hayes believes that Bitcoin’s direct perspectives can be rocky. Hayes sees Bitcoin potential to re-review from 70,000 to 80,000 USD-level USD-level, which are clearly above the previous cycle, but still below the current market. “If Bitcoin runs a minus, it will also do it on advantages,” Hayes writes, stating that BTC often comes out in front of time-honored actions.

He cites a significant run to $ 110,000 around mid -January (Trump’s inaugural schedule), and then withdrawal to USD 78,000 at the end of February. “Bitcoin screams that the liquidity crisis is almost, despite the fact that the listed indicators in the US are still close to their highest levels,” he notes. “I strongly believe that we are still in the bull cycle, and as such in the worst case it will be the highest of all time in the previous cycle of $ 70,000,” says Hayes, emphasizing his belief that all grave declines are the possibilities of accumulating, not selling panic.

In the opinion of Hayes, “Kiss of Death” does not apply to the death of Bitcoin, but about the obsolete Fiat systems that tries to stop the spiral debt load and political Brink. He claims that short-term chaos on time-honored markets-sunded by the cuts of expenses driven by Doge and hesitating Fed-last, pave the path of the novel round of monetary expansion.

Lower line? Hayes insists that focusing on liquidity is the best strategy: “Let politicians do politicians, stay on your belt and buy bitcoins.”

During the BTC press it traded at USD 83,725.

A highlighted image from YouTube, chart from tradingview.com