Arthur Hayes has declared that the rise of Bitcoin today has less to do with its programmed halvings and more to do with what Donald Trump and Xi Jinping are doing with their currencies right now.
In his latest essay, “Long Live the King,” the crypto trader says he thinks every society still fights over scarce resources. He says we are not living in some sci-fi age of infinite supply. Because energy and goods are limited, humans use money to decide who gets what.
Arthur calls money a “devilish construct” that sets the price of scarcity. Price and quantity of money, he argues, are the two most important variables in society. Any distortion of them leads to dysfunction. He notes that all economic ideologies meddle with money in one way or another.
He explains that while free markets balance scarcity, people hate volatility. Governments step in to regulate markets and money, claiming to prevent immoral outcomes like slavery or to provide collective goods. But once they control money, they can force its use.
Sometimes they act benevolently, other times they act as “despotic monetary dictators.” So all governments end up debasing their money supply because politicians refuse to wait for real scientific breakthroughs that could lead to abundance. Instead, they keep printing. Societies, however, still find ways to protect themselves.
Governments print, people resist, Bitcoin enters
Arthur points to the internet era, where central governments became even stronger through technology. The question then was how people could defend the right to sound money. He says Satoshi’s Bitcoin came as a gift at the right time.
The BitMEX founder calls it the best form of money yet created, though still valued in relation to the dollar because of America’s dominance. He says Bitcoin’s price shifts follow the supply and price of dollars. That, not the halving cycle, is what matters now.
Arthur recalls three earlier cycles. First was the Genesis cycle (2009-2013), when the global financial crisis wrecked banks. Fed chair Ben Bernanke launched unlimited QE in 2009. China flooded the world with credit. Bitcoin surged but then collapsed in 2013 when both Fed and PBOC slowed money expansion. Dollar supply peaked and rolled over, yuan credit growth slowed, and the bubble burst.
The ICO cycle (2013-2017) came next. Ethereum’s launch fueled token sales. Bitcoin rose because of Chinese liquidity, not American. Credit surged in 2015 as the yuan was devalued. But as yuan credit growth decelerated and the dollar tightened, Bitcoin’s bull run ended in late 2017.
Then came the COVID cycle (2017-2021). Arthur says COVID “definitely killed millions,” but governments worsened it with poor policies. He argues the crisis became an excuse to strip freedoms and print at historic levels.
Donald Trump launched helicopter money, the biggest populist handout since FDR’s New Deal. Trillions entered markets. The dollar supply doubled, and the price of money fell to zero. China, meanwhile, kept tight reins.
Xi Jinping used the period to crack down on property speculation with his “Three Red Lines” rule. That meant China’s credit didn’t fuel the bull run. By late 2021, U.S. inflation soared, Biden ended stimulus checks, and the Fed turned hawkish. The bull market died.
New world order shapes new path
Arthur argues the current cycle, from 2021 onward, is different. He says America is no longer the unquestioned empire. To hide the pain of change, politicians keep printing. Under Biden, Treasury Secretary Janet Yellen drained the Fed’s Reverse Repo Program by issuing more T-bills, injecting $2.5 trillion of liquidity.
Her successor, who Arthur humorously calls Buffalo Bill Bessent, carried on until the RRP hit near zero. Meanwhile, China battled deflation. Xi stayed committed to lowering property values. That limited China’s role in global liquidity.
Arthur writes that many traders now call the bull market over, but he disagrees. He cites Fed actions and PBOC signals as proof that liquidity will return. He points to Trump’s return to office, where he pushes to “run the economy hot” and cut rates despite inflation being above the 2% target.
He highlights Trump’s plan to lower housing costs to unlock trillions in equity. Bessent also plans to deregulate banks to boost lending. Arthur concludes that the direction is clear: cheaper money and higher supply.
On China, he says policymakers will step in if pressure rises, and while they may not flood markets like 2009 or 2015, they will not block global liquidity growth either.
Arthur ends by telling readers to watch Washington and Beijing. Both are signaling easier money. He writes: “Listen to our monetary masters in Washington and Beijing. They clearly state that money shall be cheaper and more plentiful. Therefore, Bitcoin continues to rise in anticipation of this highly probable future. The king is dead, long live the king!”
