Arthur Hayes, the co-founder of BitMEX and CIO at Maelstrom, contends that the world financial landscape is experiencing a significant transformation that may drive Bitcoin to the $1 million milestone.
Hayes suggests that the escalating trade conflicts between the United States and China are fast-tracking the disintegration of established economic principles, thereby allowing neutral assets like Bitcoin to emerge as key players.
How the US-China Standoff Might Elevate Bitcoin Demand in a Changing Financial Landscape
In a post on X dated April 5, Hayes proposed that the exchange rate between the US dollar and the Chinese Yuan (USDCNY) might escalate to 10.00.
This potential increase is attributed to Chinese President Xi Jinping’s probable unwillingness to change the nation’s economic trajectory to satisfy US demands, particularly considering Donald Trump’s aggressive trade policies.
“USDCNY is heading to 10.00 because there’s no chance that Xi Jinping will acquiesce to the changes Trump desires. This scenario provides the super bazooka that BTC needs to surge swiftly towards $1 million,” Hayes shared on Twitter.
Recently, global financial markets have been jittery following the Trump administration’s imposition of a 10% universal tariff on all imports. In retaliation, China, facing even heftier tariffs of up to 34%, is set to introduce its own tariffs on April 10.
Meanwhile, Trump has maintained a combative stance, labeling China’s response as erroneous.
“CHINA PLAYED IT WRONG, THEY PANICKED – THE ONE THING THEY CANNOT AFFORD TO DO!” Trump expressed on Truth Social.
While this political back-and-forth continues, Hayes perceives deeper risks lurking beneath the surface. He posits that the ongoing tariff conflict could erode the global stature of US Treasuries and equities.
For many years, the US has disseminated dollars by running trade deficits, while other countries reinvested those dollars into American financial assets. This system, as per Hayes, may no longer be viable.
If nations cease accumulating dollars, their interest in US bonds and stocks will diminish. Some may even begin liquidating reserves to safeguard their economies.
Hayes emphasized that even if Trump were to reverse policy, confidence would not be restored, as global leaders may no longer find US trade policy reliable.
“Even if Trump softens the tariffs, no finance minister or world leader can afford to gamble on Trump changing his mind again; thus, normalcy cannot be restored. Decisions must prioritize national interests,” Hayes asserted.
In this context, Hayes envisions a renewed relevance for assets that are not dependent on any single governing body. He notes that gold, traditionally seen as a safe haven, could regain its prominence.
“The dollar will continue as the reserve currency, but countries will maintain gold reserves to facilitate global trade. Trump has hinted at this since gold is exempt from tariffs! Gold must circulate freely and affordably in the new financial order,” Hayes remarked.
Nevertheless, Hayes believes Bitcoin might be even more attractive in a landscape characterized by decentralization, capital movement, and diminished faith in conventional authority.
“For those looking to adapt to a revival of pre-1971 trade dynamics, consider investing in gold, gold miners, and BTC,” he concluded.
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