Interview with Arthur Hayes: Trump's Tariff Gamble, ETH Set to Return to All-Time Highs, Circle IPO Not Worth Investing In
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Interview with Arthur Hayes: Trump's Tariff Gamble, ETH Set to Return to All-Time Highs, Circle IPO Not Worth Investing In
Arthur Hayes believes Ethereum is the most undervalued mainstream L1, expecting it to reach its all-time high before SOL, while maintaining a cautiously bullish outlook on SOL.
Navigating Web3 tides with focused insightsGuest: Arthur Hayes, Co-founder of BitMEX and CIO of Maelstrom
Compiled by: BitpushNews
Summary: In this podcast episode, Arthur Hayes discusses Trump's tariff policies, the benefits Bitcoin stands to gain from global liquidity expansion, his view that Ethereum is the most undervalued major L1 and will rebound to its all-time high before SOL, a cautiously bullish outlook on SOL, and his thoughts on Circle—the issuer of USDC—filing for IPO.
Below is the compiled transcript:
Host: What’s your take on Trump’s tariff policy? Who are the winners and losers in this trade war?
Arthur Hayes: First, I set aside moral judgments about economic policy and focus instead on adapting to the situation and profiting from it. Questions aren’t inherently good or bad—they’re relative. Rather than reacting emotionally, adjust your portfolio.
If Trump truly wants to eliminate America’s multi-trillion-dollar annual trade deficit and prove his policies work to his base, then his current actions make perfect sense.
But there’s another side: when countries like Japan earn dollars through exports, they keep their currencies weak by not converting those dollars back into local currency, but instead buying U.S. financial assets—mainly Treasuries and stocks. This is precisely why U.S. markets have vastly outperformed the rest of the world over the past 20–30 years, and why Treasury yields remain flat despite the national debt growing sevenfold since decades ago.
Trump is trying to break this cycle. He tells Americans: “I’ll bring back good jobs (especially for those without college degrees),” but the cost is reduced foreign financing for the U.S. government and stock market—because those countries will earn fewer dollars. It’s a simple equation: current account balance and financial account balance move in opposite directions.
Is this good or bad? From the logic of Trump’s policy framework, it’s entirely rational. The key lies in who his voter base is: primarily blue-collar, less-educated workers. Democrats, by contrast, are supported more by affluent, highly educated individuals who own financial assets. Over the past 40 years of globalization, the former lost out due to offshoring, while the latter benefited from corporate profits and rising equities. These two worldviews are inherently opposed, and Trump is delivering on promises to his core supporters.
Host: You seem to avoid value judgments. As an American, do you personally agree with Trump’s policy goals?
Hayes: It depends on who you want to please. Data shows: over 50% of those earning more than $100K voted for Harris; lower-income groups leaned toward Trump.
Education level is the key dividing line: highly educated people work in knowledge-based industries (tech, finance, law); those without degrees traditionally worked in manufacturing.
The reality of the past 40 years in America: companies moved factories overseas to cut labor costs → boosted profits → bought back shares → enriched shareholders. But domestic manufacturing workers became victims of globalization. Trump speaks for the latter; Democrats protect the former. There’s no absolute right or wrong—just competing interests among different groups.
Host: You previously predicted the Fed wouldn’t tighten monetary policy due to tariffs. Do you still hold that view?
Hayes: I laid out the concept of “fiscal dominance” in my BBC article—the Fed is essentially a funding tool for the government. Former Fed Chair Burns gave a famous speech in Yugoslavia in 1979, stating clearly: when society expects the government to solve every problem (which requires fiscal expansion), the central bank’s duty to fight inflation becomes secondary to keeping government funding costs low.
Powell now faces the same dilemma. Despite strong U.S. economic data (GDP above trend, unemployment at historic lows), he’s paradoxically slowing QT and cut rates in September and December last year. The root cause? $36 trillion in debt and exponentially growing interest payments. When rigid buyers of U.S. Treasuries like Japan earn fewer dollars due to tariffs, the Fed must step in and buy. Powell has already signaled this clearly:
Reducing the pace of QT; considering reinvesting MBS paydowns into Treasuries; calling tariff-driven inflation “transitory” (a repeat of 2022).
This reveals his true priority: ensuring cheap financing for the Treasury. Trump’s claim of “reducing the deficit from 7% to 3%” isn’t real austerity—it’s about diluting debt via nominal GDP growth. In this flood of fiat, Bitcoin will rise alongside gold.
Host: You previously predicted Bitcoin would break 110K before dropping below 76.5K. Are you revising that view?
Hayes: No revision. 76.5K was the March 2023 low; 110K was the all-time high reached on January 20—the day Trump took office. Global liquidity is about to surge: the Fed, ECB, and BoJ will all be forced to ease. Bitcoin benefits in both deflationary collapse and inflationary breakout scenarios.
Host: You mentioned Bitcoin might decouple from traditional markets. What’s your outlook on its future price?
Arthur Hayes: I believe Bitcoin could see a rebound in the coming months. I’ve forecasted it will first break 110,000 USD, potentially rising all the way to 250,000 USD. It all hinges on global liquidity and the monetary policies of the Fed and other major central banks.
Host: What’s your take on the recent incident at Hyperliquid?
Arthur Hayes: Clearly, people need to recognize that decentralization in many projects remains an ideal. Hyperliquid has been quite transparent about their stance. While I’m not familiar with their technical specifics, this looks like centralized control. We dealt with similar issues at BitMEX—high-leverage, low-liquidity contracts are vulnerable to exploitation. I think Hyperliquid’s developers should learn from other major exchanges—including those that copied the BitMEX model. They may need to reevaluate their margin policies and liquidation mechanisms to prevent recurrence. Centralized behavior within seemingly decentralized projects isn’t new; BitMEX and others have faced similar scrutiny.
Secondly, most users probably care more about price, speed, and fees. As long as the trading experience is smooth and profitable, they don’t mind how things work underneath. From a user perspective, as long as they’re compensated and can keep trading, they likely won’t care.
This is the decentralization dilemma. Investors and traders must weigh the risks of using decentralized platforms—vulnerability to bad actors and regulatory pressure. Platform teams must also consider these issues, though their boundaries don’t always align perfectly. It’s an ongoing debate with no clear right or wrong answer.
Host: What do you think about Circle’s upcoming IPO?
Arthur Hayes: Honestly, I don’t think Circle’s IPO is worth investing in. Their business model relies on net interest margin, but they face intense competition, especially from Tether.
Beyond that, Circle heavily depends on Coinbase as a distribution channel. They’re entirely reliant on Coinbase’s distribution arm to survive—most of their net interest income goes to Coinbase, who then distributes the product. So why would I buy Circle’s IPO? If you want exposure to the market leader, just buy Coinbase directly.
Host: What’s your view on current investment opportunities in crypto? Which projects are you watching?
Arthur Hayes: Our investment strategy focuses strictly on entry price—we don’t blindly chase hype. Many projects today are overvalued, especially early-stage ones. That’s why we now prefer high-quality projects that have endured market stress and dropped significantly in price but still maintain solid fundamentals.
Host: What about Ethereum and Solana? Which one has better prospects?
Arthur Hayes: From a risk-reward standpoint, I see more potential in Ethereum.
Although Ethereum is currently seen by many as an unpopular asset, it’s often these “hated” assets that perform best during market rebounds. Solana has performed well recently, but its future development faces some uncertainties.
I stick firmly to contrarian investing—seeking out the most despised assets in a new cycle. Right now, Ethereum is a textbook example. As the most questioned mainstream L1, it has full potential to rebound to its near-$5,000 all-time high from 2021 before Solana does. This divergence between market sentiment and intrinsic value creates a prime opportunity.
So if you ask me which to invest in, I’d pick Ethereum. Its role in the broader crypto ecosystem remains significant. Especially in dApps and smart contracts, Ethereum is still the most competitive base layer. As long as it can address scalability, it still holds substantial upside.
Host: Back to Bitcoin—you’ve said it could reach 250,000 USD. When might that happen?
Arthur Hayes: It depends on global monetary policy. I believe if major economies continue expanding money supply, financial markets will be flooded with abundant fiat liquidity. In that environment, Bitcoin—as an inflation-resistant asset—will enter a new bull phase. Thus, 250,000 USD isn’t an unrealistic target, possibly around 2025.
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