BitMEX Founder’s Theory On How Bitcoin (BTC) Will Hit $1M – Benzinga
Arthur Hayes, the billionaire founder of cryptocurrency exchange BitMEX, has a new theory about how Bitcoin’s BTC/USD price could breach $1 million.
What Happened: In a new blog post on Medium, Hayes outlined how a phenomenon he calls “The Doom Loop” would ultimately see Bitcoin valued 2,500% higher than its current price.
Hayes defines “The Doom Loop” as the three things countries do to finance their deficit: selling debt to domestic entities, the central bank printing money, and selling debt to foreigners.
The Theory: If surplus countries decide they would rather save in gold, hard commodities, and/or Bitcoin, then they will no longer purchase Western debt assets, hypothesized Hayes.
This will likely result in “uncomfortably high” inflation, leading central banks to resort to yield curve control (YCC) to cap yields so the government can pay its bills in nominal fiat terms, according to Hayes.
According to him, there will be no takers for the trillions of dollars worth of USD Treasury bonds the Federal government issues at negative real rates. Even commercial banks like JPMorgan Chase & Co. JPM have explicitly said they have no interest in purchasing treasuries with excess cash.
“YCC is the end game. When it is finally implicitly or explicitly declared, it’s game over for the value of the USD vs. gold and more importantly Bitcoin. YCC is how we get to $1 million Bitcoin and $10,000 to $20,000 gold,” said Hayes.
See Also: HOW TO BUY BITCOIN (BTC)
The former BitMEX CEO noted that several factors, including the Russia-Ukraine conflict, have already put this economic scenario into play.
“Remember: The Doom Loop = $1 million Bitcoin = $10,000 — $20,000 Gold,” Hayes wrote.
He expects these predictions to be realized by the end of the decade and that Bitcoin farm-to-table economies will take shape across the globe.
Last week, Hayes said he expected Bitcoin to fall as low as $30,000 in the current cycle, given its high correlation with tech stocks.
Price Action: According to data from Benzinga Pro, Bitcoin was trading at $38,650, down 4.41% over 24 hours.