Arthur Hayes KBW Summit Speech Transcript: Welcoming the Million-Dollar Era of Bitcoin
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Arthur Hayes KBW Summit Speech Transcript: Welcoming the Million-Dollar Era of Bitcoin
By 2028, the price of one bitcoin will be approximately $3.4 million. Although this figure seems absurd, the "million-dollar" era of Bitcoin is approaching.
Navigating Web3 tides with focused insightsCompiled by angelilu, Foresight News
On September 23, Arthur Hayes attended the KBW 2025 Summit in South Korea and delivered a keynote speech. His presentation outlined a potential future of "wild money printing" in the United States, analyzing its historical roots, political drivers, and possible implementation mechanisms. He also explained why we, as crypto investors, should care.
Arthur Hayes emphasized that by comparing Bitcoin's price surge during the pandemic to the scale of credit expansion at that time, the price of one Bitcoin could reach approximately $3.4 million by 2028. While this figure may seem absurd, the era of Bitcoin reaching "a million dollars" is approaching. Below is the full transcript of Arthur Hayes' speech:
Opening & Background: Moving Toward Wild Money Printing
Alright, this will get a bit technical—talking about who votes on what and so on. But I think it’s crucial to understand where we are on the path toward America eventually going into wild money printing. This actually started with Donald Trump’s election and his appointment of a Treasury Secretary—I call him “Buffalo Bill.” They aren’t fully in place yet, but they’re sending all the right signals. Mainstream financial media are already talking about how terrible Trump is—for example, how he daily attacks Jerome Powell on social media (Truth Social) calling him “Mr. Too Late.”
In the end, the Fed has cut interest rates permanently, which is good—but they could have done more. How do we get to wild? How do we make Bitcoin rise to a million or beyond, and let any altcoins in our portfolios increase 100x even without leaders, revenue, or customers? I know that’s what you want me to talk about.
How do we get there? It starts with understanding how the Fed votes, which committees are responsible for what, and how we move toward yield curve control. That’s why the article I released after stepping down, and the subsequent talks, focus on this. To understand where we’re headed, let’s go back to history—because history foreshadows the future.
Historical Review: War Financing in the 1940s
Back in the 1940s, what happened? There was a world war. The U.S. entered in 1942. Obviously, when you enter a war, what do you do? You print massive amounts of money. How? You tell the central bank to lower the price of money and increase its quantity, so the central government can crowd out everyone else and borrow to build weapons. How did the U.S. finance its involvement in WWII?
The Federal Reserve essentially agreed with the Treasury to manipulate the bond market, allowing the U.S. government to issue debt at extremely low cost. Here’s a photo of the Tuskegee Airmen, preparing to fight and sell war bonds. What were Treasury yields like then? For nearly a decade, bills under one year were capped at 0.375%. On long-term Treasuries, 10- to 25-year bonds were capped at 2.5%. This was the U.S. version of yield curve control.
Yield Curve Comparison & Future Speculation
Here is a yield curve chart. The orange line represents today’s approximate situation—I made this over the weekend. As you can see, 1- to 3-month T-bills are around 4%, 10-year Treasuries around 4.5%, and 30-year bonds around 4.75%. This is our current yield curve, contrasted against the yield curve at the end of WWII in the 1940s.
In Trump’s view, this is exactly what he wants to create. He wants to turn the orange line into the purple line. As investors, we must ask: how do we get there? We need to make bold assumptions. I’ll dive into bureaucratic politics, which is obviously messy because we’re dealing with people—and people are strange; they do unexpected things.
So I’ll outline a possible path, though I don’t know if it will actually happen. But based on how I currently manage Maelstrom’s investment portfolio, the probability is high enough for me to push risk exposure close to maximum—even though Bitcoin has already risen from around $3,000 to $12,000 and is now in a weak phase.
Mechanics of Yield Curve Control & the Fed's Third Mandate
What is the mechanism of yield curve control? As you know, Steven Moran, a member of the Federal Reserve Board, declared the Fed’s third mandate—one that’s actually written in the 1913 Federal Reserve Act: the Fed has a responsibility to “maintain moderate interest rates on government securities.” What does “moderate” mean? Whatever they want it to mean. So when I say the Fed’s third mandate is to print money to best finance national debt, that’s what I mean.
Why is financing large-scale fiscal spending and credit creation so critical for the U.S. now? The reason remains the same. The U.S. is at war—or more importantly, it has basically lost its last two wars. It lost the war against Russia in Ukraine and was forced to stop intervening in Iran just 12 days later because it ran out of missiles to help Israel defend itself.
It turns out the U.S. industrial base no longer exists. Over the past four decades, it’s been relocated to China. Now, the U.S. cannot produce enough artillery shells to defeat Russia, nor enough missiles to help allies bomb their targets. This is exactly what Trump truly wants to fix—or at least try to fix as quickly as possible. This requires credit. And that credit will come from the banking system and the U.S. Treasury.
Controlling Short-Term & Long-Term Interest Rates
So specifically, how do you control the T-bill market? You can lower the interest rate on excess reserves. These are reserves banks hold at the Fed, currently set near the lower bound of the federal funds rate. They can also lower the discount rate. When banks are in trouble—like during the 2023 regional banking crisis—they borrow from the Fed’s discount window at a certain rate. If I can drop both these rates to whatever level I want, I can effectively cap T-bill yields.
A key committee I’ll discuss later is the Federal Reserve Board of Governors. They control the short end of the curve—the rate on excess reserves—and influence the rate at which banks borrow from regional Fed discount windows. Then, how do you manipulate the long-end of the Treasury market?
We first need to look at the System Open Market Account (SOMA). When the Fed conducts quantitative easing (QE) by creating reserves and buying bonds from banks, those bonds end up in the SOMA account. They publish the balance of this account weekly. This is the metric we can use to monitor whether they’re truly implementing yield curve control—whether they’re buying bonds at a specific price indefinitely to keep yields at a targeted level.
Shift in Credit Creation: From Central Banks to Commercial Banks
If you study how Japan’s yield curve control works, you’ll find the Bank of Japan sets a target interest rate and keeps buying bonds until that rate is achieved. Then, if you want to profit, you sell bonds to them, pushing yields down, prices up, expanding the balance sheet, increasing credit demand in the system—and naturally, crypto goes up. The committee responsible for this expanded balance sheet is the Federal Open Market Committee (FOMC), which I’ll explain in detail shortly.
The second thing is credit growth generation. I wrote an article called “Black and White,” roughly nine to twelve months ago. In it, I explored the difference between credit creation at the central bank level versus at the commercial bank level.
Since the 2008 global financial crisis, we’ve been in an era where central banks globally dominate credit creation. When central banks drive credit issuance, what kind of activities do they fund? They favor large corporations and financial engineering. So if you’re a private equity investor in London, New York, Hong Kong, or Beijing, you load up on debt to acquire a company, take out operating profits as dividends, and resell it at a higher EBITDA multiple—you make money. You don’t create new capacity; you just lever existing capacity.
This is why the U.S. has no more industry—because since the 1980s, you’ve been doing leveraged buyouts. You acquire companies, pile on debt because you can access the corporate bond market, and large firms can issue money outside the banking system. Because the Fed pays big money, all the wealthy want to buy these institutional risk-free assets. That’s why MicroStrategy succeeded. He could issue debt into these markets. So we issue cheap debt and then buy Bitcoin. That’s basically how MicroStrategy became a major player.
Now, can this model help President Trump produce more bombs? No. They need more industrial capacity in the U.S. They need SMEs to get credit, hire workers, manufacture batteries, and produce goods. They need bank lending. When the Fed constantly “cranks the handle” (prints money), it crowds out space—so community banks and regional banks can’t operate. They need a steep yield curve. They need to lend and earn a spread. A recent Wall Street Journal article described the Fed’s policy as “gain of function”—a term originally used to criticize coronavirus policies. The article essentially says the Fed is responsible for destroying American industry and worsening inequality. He’s 100% correct—but he’s also a hypocritical fraud because he profits from it too.
So this economy is interesting. But his point is, he wants to give regional banks the power to lend. And regional banks need a steep yield curve. Therefore, Trump wants to see a “bull steepening” of the yield curve—meaning a general decline in rates combined with a steeper slope, where banks borrow deposits at low short-term rates and lend at higher long-term rates, based on spreads tied to 10- or 30-year U.S. Treasury yields.
If you look at the situation in the 1940s, that spread was nearly 2%—very profitable for banks. Today, it’s only 20 basis points. A few years ago, it was even negative. So by crushing small banks, you’ve essentially killed national credit production and industrial output. Thus, Trump not only wants to steepen the yield curve—he also wants to remove all the “bad” regulations that hinder small banks from lending to SMEs. By making banks more profitable, they’ll do what the government wants.
How Trump Can Control the Fed
Now we must understand two committees, because Trump has his goals. He’s the “ambassador” of the Treasury, telling you exactly what they want to do. So how can they transform the Treasury and the Fed—two independent entities—into a cooperative body achieving these shared goals?
First, the Federal Reserve Board of Governors. It has seven members, all nominated by the president and confirmed by the Senate. This is crucial. Trump currently controls the Senate—we’ll see after the November 2026 midterm elections whether he maintains control. But signs are troubling: his nominees face tough confirmation battles. Steven Moran, recently appointed by Trump to the Fed Board, was approved last week by just one vote. It’s very tight. If Trump fails to confirm nominees within the next ~12 months, he’s finished—because opposing Democrats won’t approve his picks. He needs more votes. This board controls the rate on excess reserves and influences the rate at which banks borrow from the Fed’s 12 regional banks’ discount windows. Most importantly, regional Fed presidents are approved by the Board via simple majority. So step one: Trump needs four votes on the Board to control the short end of the yield curve and install more allies into the FOMC, ultimately gaining control over the balance sheet.
The FOMC has 12 members: seven from the Board and five rotating regional Fed presidents—with the New York Fed president holding a permanent seat due to their outsized influence on the U.S. financial ecosystem. What does the FOMC do? We know they set the federal funds rate. They meet monthly (or nearly so) and manage the System Open Market Account (SOMA). They decide the scale of QE, the pace of bond purchases, and which bonds to buy—this is extremely important.
How can Trump gain control of the Fed Board? You need to roll “snake eyes” and “boxcars.” Here’s a fascinating chart. We see Trump has two senators—Bowman and Waller—who want to become Fed governors. We know they were dissenters at the July meeting, wanting rate cuts while Jerome Powell and the majority held steady. They’ve publicly pledged allegiance to Trump.
Cook is the most recent Fed departure. She left suddenly in August. Rumors suggest her husband engaged in unethical insider trading during Fed meetings, and she resigned preemptively to avoid being forced out by an angry Trump. That’s how Steven Moran got in. Now Trump has 3 out of 7 votes. The fourth is Lisa Cook. If you follow the media, she’s a Biden appointee. Accusations claim she committed mortgage fraud, falsely declaring her primary residence to secure a lower mortgage rate. Her case has been referred to the Justice Department for possible criminal investigation. Currently, she’s stubborn—refusing to leave, refusing to resign. But I believe by year-end, she’ll receive some political assurance and step aside. Then Trump will have four votes, controlling the Board.
Their first move would be accelerating the decline in short-term rates. There’s an interesting arbitrage that could force the FOMC—even before full Trump control—to cut rates faster than expected. If the Board lowers the rate on excess reserves and the discount window rate, massive funds will flood into the federal funds market. This opens an arbitrage opportunity for large commercial banks. What will they do? Commercial banks pledge assets to borrow from the discount window at rates below the federal funds rate, then lend out at around 4%—a great carry trade. This arbitrage is essentially against the Fed, forcing it to print money and hand it to banks—a complete absurdity, and precisely why it would compel the FOMC to cut rates.
I saw Steven Moran’s recent interview—yesterday or this morning on Bloomberg. He said Fed monetary policy is 2% too tight. That basically tells you where they want to go. They want the federal funds rate down to around 2%, and they want it yesterday. In fact, if Trump can remove Lisa Cook, he could execute this arbitrage by year-end and potentially bring the federal funds rate below 2% very quickly.
How Board Control Leads to FOMC Control?
As I said, all Fed Board members are permanent voting members of the FOMC. And the Board approves regional Fed presidents as rotating FOMC voters. I believe Philadelphia, Cleveland, and Minneapolis—along with New York—will be the four voting regional presidents in 2026. All 12 regional Fed presidents face reappointment next February.
How does this work? Each of the 12 regional Fed banks has its own board. This structure dates back to when different regions of the continental U.S. had varying needs regarding agricultural taxation. Each regional Fed board consists of three classes of members. Six B and C class directors jointly elect the bank’s president. Who are these regional Fed board members? Here’s a list—all information will be published online later. You’ll notice these Fed bank board chairs are either bankers or industrialists. What do bankers and industrialists always want? Cheap money. Lots of money. So why would these people oppose Trump’s policy of lowering rates and increasing money supply? It increases their wealth. Since we’re all self-interested, I believe they’ll likely vote for presidents who follow Trump’s wishes—favoring looser monetary policy. If they don’t, the Trump-controlled Board can effectively signal: if you don’t elect a dovish chair, we won’t approve him.
So now Trump has seven votes—he’ll gain control of the FOMC sometime in the first half of 2026. Once they have a majority on the FOMC, what can they do? They can return to QE. They can stop participating...
We’re now in a QE period because the Treasury has massive debt to issue. Yet the Treasury dares not issue long-term debt. They’re afraid—just like during the Great Depression—of long-term debt. So they’re issuing only short-term debt. That’s why clever moves around overregulation are so important—they need an inelastic buyer who will purchase these Treasuries or bills regardless of price. But if they control the FOMC, and the FOMC agrees that yield curve control is necessary to achieve the Trump administration’s political-industrial goals, they’ll invest trillions in debt. The Fed will buy most of these bonds, as FOMC members restart QE.
Thus, through control of the Board and FOMC, along with this timeline, Trump can essentially recreate the yield curve I showed—from 1942 to 1951.
Why Should We, as Crypto Investors, Care?
I certainly have a question here—there’s a lot of math involving money markets. I know it resembles a map of money markets, maybe look at Japan. But guys, that’s exactly why we’re here. So with the U.S. moving toward yield curve control, how high could Bitcoin go? The number—well, it’s obviously absurd: $3.4 million. Do I stand here today believing we’ll get $3.4 million Bitcoin by 2028? Probably not. But I’m interested in the direction and the potential scale. I hope we reach a million, others hope too—that’s fine—but I remain highly skeptical.
This isn’t just a mental exercise—it’s based on the volume of Treasuries to be issued. What will the situation be when Trump and his team leave office by late 2028? I checked my Bloomberg terminal, studied how much debt will mature to enable rate cuts, and added the estimated $2 trillion annual federal deficit from now to 2028—roughly in line with Congressional Budget Office estimates. This gives us a figure: $15.3 trillion in new Treasuries must be issued over the next three years.
During the pandemic, how much did the Fed buy? About 40% to 45% of Treasury issuance. I believe this percentage will be higher this time, because foreign appetite for U.S. Treasuries will likely be lower than before—especially given Trump’s actions. He tends to increase debt for U.S. reindustrialization by devaluing the dollar, which unsettles others. So why would I do it? I don’t know, I wouldn’t. So we effectively get $7.5 trillion in credit creation. That’s how much our balance sheet will grow from now to 2028.
The second part is “phantom” credit creation. How many loans will be extended to SMEs across America? This is hard to predict. So I said, fine, look at what happened during the pandemic. That was the last time they successfully executed this policy—basically from February 2020 to the peak at end-2021. If you examine the Fed’s weekly data on the U.S. banking system’s balance sheet, it’s a solid indicator of credit and loan growth. I estimate we saw about $3 trillion in growth over those years. So over three years, times three, we get roughly $15.2 trillion in total credit creation.
Now, what does this mean for Bitcoin’s price? Going back to pandemic experience, I use a rough slope to measure the relationship between the percentage rise in Bitcoin’s price and each dollar of credit created under this framework. The slope is 0.19. Multiply that by $15.2 trillion in credit growth, then by Bitcoin’s baseline price of $115,000. That’s how we arrive at an estimated Bitcoin price of around $3.4 million by 2028. I’m almost 100% sure this won’t happen. But I think this framework helps understand the flow of credit—from the Fed to the Treasury, then from the banking system to funding U.S. reindustrialization. We know what happened when this policy lasted just one year during the pandemic. What if it lasts three? When the Fed and Treasury coordinate to print money and, in their words, send the U.S. economy to “Valhalla,” we’ll see Bitcoin exceed $1 million.
That’s why I’m highly confident the four-year cycle doesn’t apply in this particular cycle. We’re in the midst of a “military-religious” realignment. If they can seize control of all monetary policy leadership—and they’re clearly highly motivated—this is what will happen. Thank you.
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Arthur Hayes
