Arthur Hayes, investment director of crypto investment fund Maelstrom, stated that the “arms race” between the USA and China in the field of artificial intelligence (AI) has forced them to loosen monetary policies, which has created a positive environment in the crypto ecosystem. According to Hayes, the ongoing war in Iran and the ongoing fight for supremacy in the AI sector will lead to more money printing and could push Bitcoin back to all-time highs later this year.
US and China competition increases money supply
Arthur Hayes pointed out that in this period when the USA and China are trying to gain superiority in artificial intelligence both technologically and strategically, both countries are loosening financial conditions for direct national security reasons. According to Hayes’ analysis, these conditions lead governments to move money into circulation more quickly and banks to expand credit. He argued that this process “created an excellent basis” for the crypto market.
Hayes stated that as a result of rapidly increasing annual AI and electrification investments (CAPEX), the amount of fiat currency currently in circulation will increasingly increase. According to analysts, this environment affects both classical financial products and crypto assets; However, cryptocurrencies, especially Bitcoin, react faster in this process.
War and domestic investment dynamics
Hayes stated that the ongoing Iran war has led to inflationary effects and countries have begun to focus on their own infrastructure investments rather than US Treasury bonds or stocks. This trend causes the acceleration of money printing along with military expenditures. “The system built with the political will, the desire to win the AI race and the financial will, printed money and bank loans, prepares a suitable environment for crypto,” Hayes said. he said.
“As of tomorrow, there will be more fiat currency in circulation, and this pace of exchange is increasing significantly. Annual investments, especially in AI and electrification, have grown significantly.”
Additionally, in an assessment he made in March, Hayes stated that the US Federal Reserve may ease monetary policy to facilitate the financing of the conflict in Iran, and this could support crypto assets.
Latest situation in Bitcoin and other assets
The crypto market reached many new record levels in 2023, with the total market value reaching up to $4.28 trillion in October. However, after the pullback at the end of the year, investors expressed different views on when exactly the market would recover.
According to Arthur Hayes, Bitcoin has been outperforming risk assets such as gold and US technology stocks since February 28.
“Bitcoin has come to the fore since February, leaving large risk assets such as gold and shares of US technology companies behind.”
According to data from CoinGecko, Bitcoin has traded between $79,467 and $82,496 over the past seven days. As of Wednesday, it was worth around $81,000; This value indicates an increase of over 31 percent from the bottom level of $ 62,822 seen on February 6. In the same period, the price of gold increased from $ 4,581 to $ 4,710, providing a return of approximately 2 percent. CryptoAppsy According to data, Bitcoin’s current price and this momentum are causing investors to target historical peak levels again.
Arthur Hayes argues that Bitcoin fell to the level of $ 60,000 at the beginning of the year, and that the historical peak of $ 126,000 may come to the agenda again with trillions more dollars and yuan to be printed globally.
