“Don’t ignore the left curve.” Arthur Hayes called for buying Bitcoin – ForkLog

In a new essay, ex-CEO of BitMEX Arthur Hayes explained which investors are the most “reasonable” and pointed to factors for further growth of the cryptocurrency market.

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According to him, there are traders who are proud that they were able to “buy Solana for $10 and sell for $200.” However, the truly insightful investors are those who embraced the “left curve” mindset during the 2021-2023 bear market.

This approach involves buying and holding digital assets, especially the first cryptocurrency, until bull cycle highs, Hayes explained.

“Bitcoin is the hardest money ever created. If you sold shitcoins for fiat that you don’t currently need for living expenses, then you’re screwed. Traditional money will continue to be printed indefinitely until the system resets,” he added.

Rescue from the outside world

The businessman noted that major economic powers such as the United States, China, the European Union and Japan are deliberately reducing the value of their own national currencies to pay off their national debt.

Parallel TradFi were able to profit from this situation through Bitcoin-based spot exchange-traded funds, Hayes noted.

As a result, institutions are urging clients to protect assets from currency devaluation. As the former head of BitMEX explained, the influx of institutional investment enhances the growth of the crypto market, thereby confirming the idea of ​​​​a “saving asset”:

“The macroeconomic environment that fueled the surge in fiat liquidity and fueled Bitcoin’s rally will become even more pronounced as the sovereign debt bubble begins to burst.”

Hayes also discussed the concept of gross domestic product (GDP), which includes inflation and real economic growth. He argues that governments are borrowing money to finance projects, hoping to “accelerate the pace of development and attract investors with promising returns.”

However, politicians often manipulate the system by keeping government bond yields below GDP growth. This allows you to spend more without raising taxes, but leads to stock and economic stagnation, the entrepreneur said.

Right choice

Hayes said the most important challenge for investors is to understand whether government bonds are a good investment. To do this, you need to compare the nominal annual GDP growth rate with the yield on 10-year government bonds:

“Real yield = 10-year government bond yield – nominal GDP growth rate. When real yields are positive, government bonds are a good investment. When real yields are negative, government bonds are a terrible choice.”

The main “trick” is to find assets outside the banking system that can grow faster than inflation, says the former CEO of BitMEX.

Hayes looked at the USNOM index, which tracks US real yields and balance sheet Fed. According to the graph, after the deflationary shock of the global financial crisis in 2008, the indicator changed from positive to negative.

“With the exception of 2009 and 2020, government bonds have been terrible investment decisions compared to stocks, real estate, cryptocurrency and so on. Bond traders succeeded only because they pumped up their transactions with insane leverage,” the expert emphasized.

The BitMEX co-founder argues that the polarized political landscape in the US ahead of the presidential election will only exacerbate the weakening of government assets.

As both major parties jockey for power and plan massive spending programs, the incentive to maintain negative real yields and encourage uncontrolled borrowing will increase, he said.

“Bitcoin was and remains the lifeline for this period. It grows in a non-linear manner on a logarithmic graph. Its dynamics are due to the limited number of coins, the value of which is expressed in depreciating fiat dollars,” Hayes noted.

To summarize, the crypto trader advised to take advantage of the opportunity provided by the recent market correction and gradually increase the cryptocurrency portfolio ahead of the summer:

“I call on all degens to take the left curve. Your guess that money printing will accelerate as politicians spend money on handouts and wars is correct. Do not underestimate the desire of the current elites to remain in power. If real rates turn positive, reassess your confidence in cryptocurrency.”

Previously, Hayes allowed Bitcoin to fall after the halving, which took place on April 20. In his opinion, the event is a bullish catalyst for the crypto market in the medium term.

Let us remind you that in the ForkLog commentary, experts explained the post-halving dynamics and predicted further developments.

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