The founder of Bitmex is confident that Bitcoin’s price will rise as central banks continue to cut interest rates, aka print money, aka inflation.
Debt spiral, rate spiral, inflation spiral
Hayes suggests that further cuts by institutions like the U.S. Federal Reserve, the Bank of England, and the European Central Bank could lead to more money being circulated in the economy, which would likely result in higher inflation.
Hayes argues that while inflation can hurt some businesses, it could benefit Bitcoin due to its limited supply and deflationary properties.
In a recent article, he explained that as the Federal Reserve, along with the Bank of England and the European Central Bank, continue to lower interest rates even with inflation above their targets, these actions could expand the money supply big time.
Hayes speculates that if the U.S. were to face a recession, the Federal Reserve might take even more aggressive measures to lower rates, further increasing the money supply.
Bitcoin supply can’t grow, only price can grow
Hayes believes that a surge in money supply could lead to higher inflation, which might harm certain businesses.
But he sees this scenario as advantageous for Bitcoin, because it has a fixed supply and is designed to be deflationary. A situation like this could send Bitcoin’s price soaring.
“They will ramp up the money printer and dramatically increase the money supply. That leads to inflation, which could be bad for certain types of businesses, but for assets in finite supply like bitcoin, it will provide a trip at lightspeed 2 Da Moon!”
Bitcoin is debasement-resistant
This perspective suggests that Bitcoin could be well-positioned for crazy gains if central banks continue on their current path. And now it looks like they will continue.
As more and more money floods the economy, the inflation will go nuts, even into hyperinflation, potentially driving investors toward assets like Bitcoin that have a limited supply.
