I don’t buy the bond part. Short term bonds have an unheard of return right now.Arthur Hayes Says BTC Is Rallying Over US Military Spending, Not ETF Hype
BitMEX co-founder says investors are offloading bonds for gold and crypto.
By: Samuel Haig • October 25, 2023
Arthur Hayes, the co-founder of the BitMEX derivatives exchange, published an essay attributing the crypto market rally to the costs associated with hawkish U.S. foreign policy and not spot Bitcoin ETF anticipation.
In an Oct. 24 essay titled The Periphery, Hayes attributed U.S. president Joe Biden’s open-ended commitment to supporting Israel’s war effort against Hamas to the recent surge in the crypto markets.
“Added to Ukraine’s tab, America’s military budget is set to truly explode,” Hayes said. “This will increase future government borrowing, and the sky's the limit when it comes to the sums of capital a war can waste.”
Hayes said institutional investors already moved to sell off bonds and treasury bills in preparation for expanded U.S. military expenditure and will be seeking returns from new asset classes.
“If long-term U.S. Treasury bonds offer no safety for investors, then their money will seek out alternatives,” Hayes said. “Gold, and most importantly, Bitcoin, will begin rising on true fears of global wartime inflation.”
Hayes’ comments come after BTC surged 19.5% in seven days, with many pundits attributing the move to progress on BlackRock’s application for an exchange-traded fund (ETF) investing spot in Bitcoin. The combined capitalization of digital assets is up 12.6% over the same period.
Hayes noted that gold has been rallying since the conflict broke out in Gaza. Gold is up 8.6% since Oct. 4, last changing hands for $1,975 per ounce, according to Market Index.
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Bitcoin ETF?
- Thread starter long
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We’re discussing two different things. I was trying to rationalize reasons for new money coming into the market. With a lot of money on the sidelines it’s easy to imagine some of that money coming into crypto just because they can’t stand it not being invested.
Doesn't matter what the catalyst...the extension must be realized. Yes I see what you are saying. Usually what will happen is some news ie the ETF ..then everybody piles on with fomo ...but the funny thing is they already missed out so fomo should be renamed slomo.
Some thoughts on two "new money" demand source potential for BTC in the coming 1-2 years
Corporations = with the new accounting rule change, buying some bitcoin for your corporate treasury now at least makes a little sense. You no longer will have to mark it at its lowest traded price. You don't have to go all Michael saylor or anything. I dont think Uncle Warren will buy any LOL but I could see a tech company with tons of cash on their balance sheets allocating a small percentage.
RIA/HNW US Retail = huge one. This is what the ETF hype is all about. No RIA is going to open a coinbase account for a client and go through all the headaches owning Bitcoin would entail. Compliance, taxes, new accounts, potential litigation. Forget about it. ETF solves all of this. They already have ETFs, it plays well with all tax and compliance systems, and no new accounts need to be opened
oh yea and the new supply of the stuff get cut in half in 6 months..
Corporations = with the new accounting rule change, buying some bitcoin for your corporate treasury now at least makes a little sense. You no longer will have to mark it at its lowest traded price. You don't have to go all Michael saylor or anything. I dont think Uncle Warren will buy any LOL but I could see a tech company with tons of cash on their balance sheets allocating a small percentage.
RIA/HNW US Retail = huge one. This is what the ETF hype is all about. No RIA is going to open a coinbase account for a client and go through all the headaches owning Bitcoin would entail. Compliance, taxes, new accounts, potential litigation. Forget about it. ETF solves all of this. They already have ETFs, it plays well with all tax and compliance systems, and no new accounts need to be opened
oh yea and the new supply of the stuff get cut in half in 6 months..
Some thoughts on two "new money" demand source potential for BTC in the coming 1-2 years
Corporations = with the new accounting rule change, buying some bitcoin for your corporate treasury now at least makes a little sense. You no longer will have to mark it at its lowest traded price. You don't have to go all Michael saylor or anything. I dont think Uncle Warren will buy any LOL but I could see a tech company with tons of cash on their balance sheets allocating a small percentage.
RIA/HNW US Retail = huge one. This is what the ETF hype is all about. No RIA is going to open a coinbase account for a client and go through all the headaches owning Bitcoin would entail. Compliance, taxes, new accounts, potential litigation. Forget about it. ETF solves all of this. They already have ETFs, it plays well with all tax and compliance systems, and no new accounts need to be opened
oh yea and the new supply of the stuff get cut in half in 6 months..
Number 2 nails it.
Uncle Warren can' t get his head around crypto.Last interview I saw,he compared it to the old chain letters.
He also said he wont directly invest in real estate,because it makes no sense for him to be a landlord,BUT he invests indirectly in RE because its a no brainer.
BTC ETF's will represent the same opportunity for sophisticated investors.An opportunity to speculate in the space without being a 'bag holder'.
When the fund managers say 'the phone wont stop with new requests',I believe its existing clients making sure their portfolio has some exposure to the opportunity they see.
Number 2 nails it.
Uncle Warren can' t get his head around crypto.Last interview I saw,he compared it to the old chain letters.
Why is anybody asking Warren buffet about Bitcoin?? That's like asking somebody really old about a new disruptive technology.
LOLWhy is anybody asking Warren buffet about Bitcoin?? That's like asking somebody really old about a new disruptive technology.
I think they’re asking him to see if there’s any indication that some of that 150 billion could go into crypto. Also, that chain letter comment could’ve been him sandbagging.
Will the ETFs only buy crypto? Or is there a chance that they’ll be enthusiastic short sellers of the BTC futures contract?
what?
What if BlackRock’s ETF turns out to be bearish on BTC? They could short the hell out of it on the futures market so all of the potential added dollars we’re talking about would push price down….what?
What if BlackRock’s ETF turns out to be bearish on BTC? They could short the hell out of it on the futures market so all of the potential added dollars we’re talking about would push price down….
ill repeat again … what?
Blackrock is going to have a spot ETF with tens of billions of dollars in it and secretly short the futures market on the other side (which they would of been able to do for years now)? You might want to rethink the mechanics here.