Riding the Rhythm of Credit: Arthur Hayes’ Take on Markets and Bitcoin
Key highlights:
Arthur Hayes believes credit creation, not geopolitical noise, is the true driver behind market movements and Bitcoin’s price.
Hayes argues that rising government spending and bank lending could inflate crypto without affecting essentials like food or rent.
He predicts a bullish crypto cycle ahead, forecasting Bitcoin at $250K and Ethereum at $10K by year’s end.
Hayes says markets dance to the beat of credit
Arthur Hayes, co-founder of BitMEX and a prominent figure in the crypto landscape, believes that understanding financial markets comes down to finding the rhythm — and in his view, that rhythm is credit creation.
Using an analogy of a dancer syncing with music, Hayes suggests that investors must stay in tune with this financial tempo or risk being left behind. For him, Bitcoin isn’t merely an asset but a direct reflection of the global fiat money supply. As governments increase spending and expand credit, Bitcoin tends to climb in tandem.
Hayes argues that the recent surge in money printing since 2009 — with trillions of new dollars entering the economy — has found a finite outlet in Bitcoin. That scarcity, he claims, has made Bitcoin the most successful fiat-denominated asset in history.
Amid headlines filled with trade disputes, military conflicts, and political turmoil, Hayes maintains that these are distractions. The real story, he says, is the consistent beat of credit expansion — the economic bassline that underpins asset inflation.
A new phase of state-led economics
Hayes suggests the U.S. is entering a phase of state-driven economic management — what he controversially terms a shift toward “fascist” economics. This transition, according to him, is driven by the government’s need to fund defense-related industries. In this model, banks are incentivized to lend, knowing the government will back those loans, especially when it comes to military supply chains.
This cycle, Hayes explains, creates money out of thin air: loans generate employment, wages fuel spending, and economic activity appears to boom. But the catch is inflation. With more money circulating and no proportional rise in goods or services, prices inevitably rise.
Unlike past approaches like quantitative easing (QE), where central banks injected capital by purchasing financial assets, Hayes calls the current policy “QE for Poor People.” Instead of targeting financial markets, the government now directs credit toward sectors it deems vital, such as rare earth mining or defense manufacturing.
Citing the example of MP Materials, a mining company that secured a billion-dollar bank loan backed by the Defense Department, Hayes illustrates how credit becomes new money, driving broader economic activity.
Why crypto might be the next policy tool
One of Hayes’ most striking claims is that governments might be ready to inflate crypto markets as a way to manage inflation elsewhere. Unlike real estate or food — where price spikes hurt average consumers — cryptocurrencies allow people to feel wealthier without impacting essential goods.
This could explain recent policy moves: retirement accounts opening up to crypto, proposals to eliminate capital gains taxes on digital assets, and increased purchases of U.S. Treasuries by stablecoin issuers. According to Hayes, these trends form a self-reinforcing loop: as the crypto market cap grows, so does demand for stablecoins, which in turn fund government debt, enabling more credit creation.
If this dynamic holds, Hayes sees significant upside for crypto. His projections are bold — $250,000 for Bitcoin and $10,000 for Ethereum by the end of the year — driven by institutional capital and favorable policy conditions. Hayes concluded:
“Ignore the noise. Follow the credit. Follow the beat.”
The bottom line
Arthur Hayes makes a compelling case for watching credit creation as the key market indicator. While many focus on political headlines, Hayes urges investors to look at where money is being created and how it flows. If he’s right, the current financial rhythm could signal one of the most powerful crypto bull cycles to date. Hayes is no stranger to such claims – just a few months earlier, he proclaimed that Bitcoin would reach $1 million by 2028.
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