BitMEX Co-Founder Arthur Hayes Says Bitcoin is Rallying on "Fears of Global Wartime Inflation"
Arthur Hayes, co-founder of crypto derivatives exchange BitMEX, believes the recent rally in the crypto market is not solely driven by anticipation of a spot Bitcoin (BTC) ETF.
In a Tuesday essay titled "The Periphery," Hayes attributed the surge in the crypto market to the costs associated with hawkish U.S. foreign policy, particularly in relation to Israel's war effort against Hamas.
Hayes highlighted the open-ended commitment of U.S. President Joe Biden to support Israel's war effort and pointed out that this, along with the escalating military budget and increased government borrowing, has fueled concerns about global wartime inflation.
"Added to Ukraine’s tab, America’s military budget is set to truly explode – especially if Hamas’ allies, such as Iran, respond by entering the fray via its proxies," the crypto veteran wrote.
"This will increase future government borrowing, and the sky's the limit when it comes to the sums of capital a war can waste."
In the article, Hayes suggested that institutional investors, anticipating expanded U.S. military expenditure, have started selling off bonds and treasury bills and are looking for alternative asset classes to seek returns.
According to Hayes, if long-term U.S. Treasury bonds no longer offer safety for investors, they will turn to alternatives such as gold and, notably, Bitcoin.
He believes that both gold and Bitcoin will experience a rise driven by genuine fears of global wartime inflation.
"Gold, and most importantly, Bitcoin, will begin rising on true fears of global wartime inflation."
Hayes mentioned that Bitcoin spiked above $30,000 on false rumours that the SEC has approved the Blackrock spot Bitcoin ETF.
"But now, directly after the Biden speech, Bitcoin – along with
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