About this video

• Video Title: Arthur Hayes: Trump’s Fed Takeover Will Send Bitcoin to $250K Before Year End
• Channel: The Rollup
• Speakers: Arthur Hayes
• Duration: 00:35:32

Overview

This video features an interview with Arthur Hayes, co-founder of BitMEX, discussing the potential impact of Donald Trump gaining control of the U.S. Federal Reserve on monetary policy and the price of Bitcoin. Hayes elaborates on how Trump could influence the Fed, the subsequent increase in fiat currency, and how this could drive people to invest in Bitcoin. The conversation also touches upon the rise of stablecoins, the dynamics of decentralized exchanges (DEXs), the concept of "commoditizing the compliment," the inevitable decline of the American empire, and potential geopolitical shifts.

Key takeaways

• Trump's Fed Control: If Trump gains control of the Fed's Board of Governors (requiring 4 out of 7 votes), he could influence monetary policy, including interest rates and the Fed's balance sheet, potentially leading to increased fiat creation.
• Bitcoin's Price Surge: Increased fiat creation is expected to drive investors towards Bitcoin as a fixed-supply asset, with Hayes predicting a potential price of $250,000 by the end of the year.
• Stablecoins and DeFi: The influx of stablecoins is seen as a catalyst for growth in Decentralized Finance (DeFi), encouraging speculation and trading on DEXs as people seek to outpace inflation.
• Perpetual DEXs: Perpetual DEXs are considered a "zero to one" innovation, offering retail traders access to high leverage that is difficult to obtain in traditional finance, potentially integrating further into the broader financial system.
• Decline of the American Empire: Hayes argues that the American empire's decline is inevitable due to gross imbalances, such as the trade deficit with countries like Germany and France, and the unsustainable debt-to-GDP ratio.
• France and the Euro: France's potential exit from the Euro is discussed as a catalyst that could force the ECB to print money, similar to the U.S. Federal Reserve.

Perpetual DEXs are considered a "zero to one" innovation because they offer retail traders access to high leverage, which is difficult to obtain in traditional finance (TradFi). In TradFi, there are restrictions like pattern day trader rules or regulatory limitations on leverage. Perpetual DEXs, on the other hand, provide an instrument that allows traders to bet with high amounts of leverage on various assets. This is attractive to traders because they desire leverage to potentially amplify their gains, and the perpetual DEX model, with its socialized loss mechanisms, allows exchanges to offer this. It essentially provides a more accessible and direct way for retail traders to get leveraged exposure, similar to margin trading but with greater flexibility and accessibility.