Arthur Hayes, former CEO of BitMEX, has reiterated his prediction that the policies of the next U.S. president, Donald Trump, could devalue the dollar, leading to Bitcoin’s price soaring to $1 million.

Arthur Hayes' latest article points out that Trump's economic policies may lead to a depreciation of the US dollar and one Bitcoin price reaching $1 million. The article said that Trump may adopt an economic development model similar to China, which will increase the money supply…
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Hayes first made this prediction in October 2023, explaining it with the prospects of limited asset issuance, the approval of spot Bitcoin ETFs, and geopolitical uncertainty. According to the expert, these factors remain relevant today. In January 2024, the SEC registered a BTC ETF, and since then, inflows into such products have reached $26.2 billion.

In his new essay, Hayes noted that Trump might use a model of “American capitalism with Chinese characteristics.” His “America First” program is reminiscent of China’s course initiated by Deng Xiaoping in the 1980s and continuing to this day.

The program includes boosting nominal GDP growth by providing tax breaks and subsidies for relocating critical industries, with companies meeting the criteria receiving cheap bank financing.

To implement this program, the U.S. Treasury will have to actively raise funds in the debt market, maintaining a massive federal budget deficit. At some point, Hayes expects the launch of “infinite QE” (quantitative easing).

The acceleration of economic growth will lead to an increase in the money supply, weakening the dollar and driving up inflation. Hayes believes that in such a scenario, deposit holders and long-term bondholders will suffer, while buyers of gold, Bitcoin, and stocks of subsidized companies will benefit.

Hayes argues that Bitcoin could demonstrate a more positive performance than during the period from March 2020 to November 2021. During the pandemic, the stimulus volume in the U.S. reached $4 trillion, resulting in the debt-to-GDP ratio falling from 132% to 115%. The expert suggests that to bring this ratio back to the level of September 2008 (70% of GDP), $10.5 trillion in new credit would need to be created.

Relying on the correlation between the volume of bank lending and Bitcoin’s dynamics, Hayes estimates the price of the latter in this scenario at $1 million.

“As the available supply of the first cryptocurrency decreases […] fiat money will seek refuges. Go long and stay there,” suggested the former BitMEX CEO.

In October, Hayes also predicted an increase in demand for digital gold as a result of inevitable economic stimulus measures from the Chinese authorities.