This article comes from: Crypto Banter

Compiled by Odaily Planet Daily ( @OdailyChina ); Translated by Azuma ( @azuma_eth )

Editor's Note: Arthur Hayes, a leading market forecaster and co-founder of BitMEX, has once again made his predictions. In a discussion on the Crypto Banter podcast early this morning, Hayes offered his insights on topics such as the possibility of interest rate cuts, ETH trends, and altcoin selection.

The following is the full text of Arthur Hayes' podcast discussion, compiled by Odaily Planet Daily. For the sake of reading fluency, some content has been deleted.

Powell and interest rate cuts, as well as market trends in the second half of the year

• Host: I've seen some of your previous tweets, especially this one from August 2nd: "Tariffs set to take effect in Q3, markets believe no major economy can create enough credit quickly enough to boost nominal GDP — Bitcoin to test $100,000, Ethereum to $3,000..." Could you elaborate on your outlook for the second half of the year? I believe Powell has to cut rates in September; he's practically under a gun. What are your thoughts?

Arthur Hayes: I don't think Powell has to do anything. I've discussed this with many macro strategists, and they've given a wide variety of reasons. Of course, some point to the labor market; some say the US may already be in recession, or will soon; and some say tariffs will disrupt everything... I understand all this noise, but humans are strange. At odd moments, they suddenly decide they need to uphold principles, maintain self-respect, and save face.

If Powell truly believes he's "Volcker 2.0," what better way to prove himself than to resist Trump's pressure? Perhaps by not cutting interest rates and staying in office until May 2026, rather than resigning early. This is entirely possible. In that case, a scenario could arise: Powell lingers beyond his term, while a slew of Democratic-appointed governors obstruct Trump's policies. I don't know the probability of this scenario, but few in the market are seriously considering it.

Of course, this doesn't mean the Trump administration can't find a way to "print money." If the government really wants to, it will always find a way. So I'm just pointing out the risks; I can't give a probability.

Clearly, I think we're entering a gray area. Friday marks the Jackson Hole summit, and Powell will be speaking. Everyone's anticipating what he'll reveal about September: Will there be a rate cut? Or will rates remain relatively tight, perhaps even higher? No one knows what he'll say. The Treasury is still issuing bonds, and the reverse repo balance has been wiped out. The market opened this week a bit weak, with ETH, for example, down 10%, so I think this is a period of uncertainty.

Will the market be higher by the end of the year? I think it will. If you're not leveraging, don't worry. It might drop another 15%-20% this week. If you have some spare cash, this would be a good opportunity to buy the dip. I believe there will be money printing before the end of the year. Bitcoin could reach $250,000, and ETH over $10,000. But before then, the fall is likely to be quite volatile.

• Host: I agree with most of your points, and this aligns with our predictions. There's likely to be a correction between now and the end of the year, followed by the true climax of the bull market. I'll look at the data. CPI is below expectations, PPI is above expectations, and the employment data has been revised... The market is currently giving an 83% probability of an interest rate cut. I think your statement that Powell is a principled person has some truth to it, but I'm inclined to believe he'll cut rates in September, barring unexpected circumstances.

Arthur Hayes: Why is cutting interest rates the "right thing to do"? The Bureau of Labor Statistics (BLS) data is garbage, completely manipulated by partisanship. The CPI is also rubbish; statistical models can be manipulated at will. The BLS director has been replaced since Trump took office, and the agency will sooner or later become his mouthpiece. So, Powell could easily say, "The data is unclear. We need more time. Keep interest rates at 4.5% for now."

I'm simply reminding everyone from another perspective: Don't pin your hopes on so-called "data." In 2022, everyone was saying the data pointed to a recession, and Powell had to cut interest rates. Instead, he raised them by 75 basis points, severely impacting the market. So, we could very well see a repeat of 2022: the market expected a rate cut, but Powell suddenly delivered a hawkish blow, sending the market plummeting.

• Host: Okay, but I think there will be at least a 25 basis point rate cut in September, if only because he's tired of the outside criticism.

Arthur Hayes: Are you sure? If he really wants to be a Volcker 2.0, this is his chance to prove himself—to stand up to presidential overreach and uphold the independence of the Federal Reserve.

• Host: So what's your baseline prediction? Do you think there will be no interest rate cuts at all this year? Or one or two? What's your baseline forecast?

Arthur Hayes: My baseline assessment is—I have no idea. I'm not going to get heavily invested in these spurious data points and get stuck in my own position. You can interpret them in many different ways, but none of them are reliable. I just think the market is expecting a rate cut from Powell, but no one is seriously considering the possibility of Powell sticking to his principles for the first time, telling Trump, "Screw you," and holding off on cutting rates in an election year.

Remember when Kamala Harris ran for president? The labor market was strong, unemployment was low, and inflation was above target, yet the Fed still cut interest rates by 50 basis points to help her. Some Fed officials even publicly stated, "The Fed will do whatever it takes to prevent Trump from getting elected." While Powell didn't say this himself, other Fed governors have made this clear. So, a situation could arise now: the market, based on data, predicts an 83% probability of a rate cut, but Powell's mind is thinking, "The Fed is above partisan politics, so we're not cutting."

I'm not saying this will definitely happen; I'm just suggesting it's a possibility. I personally wouldn't trade based on the assumption of a 50 basis point Fed rate cut. Even if Powell doesn't, the Trump administration has plenty of other ways to stimulate the market. While there might be short-term pain, it will likely only push the Trump administration to use more aggressive and unconventional money printing to advance its economic agenda.

• Host: So your baseline judgment is: they will definitely find a way to "print money" before the end of the year?

Arthur Hayes: Exactly. They will definitely do something. I don't know what the specific means will be, but I'm pretty sure if Powell insists on not cutting interest rates, the government will find a way to "drain liquidity."

ETH short-term and long-term price predictions

• Host: Okay, so you said before that ETH would test $3,000. Do you think ETH will reach $3,000 first and then break through its all-time high?

Arthur Hayes: I don't think so. When I said ETH would test $3,000, it was before it broke $4,000. Jane and I later bought back some ETH. Chart analysis suggests it's definitely going higher, and we can't fight the market.

If Powell delivers a hawkish speech at Jackson Hole, I think ETH may first retest $4,000.

• Host: This cycle, Bitcoin's price has surpassed its previous high by approximately 70%, while ETH is still struggling to break through its previous high. Do you think ETH will experience a similar catch-up rally, perhaps reaching 70% above its previous high, perhaps reaching $5,000, $6,000, or even $7,000?

Arthur Hayes: I think ETH will reach $10,000-20,000. Once it breaks through its all-time high, the upside potential is completely unlocked. Furthermore, digital asset treasury companies are constantly raising funds. If the assets they're buying are constantly hitting new highs, fundraising will be easier, and the price will continue to rise.

It all depends on how much capital these companies can raise and how much money the government prints. I'm not one to stick to a "four-year cycle." How long this cycle lasts depends on how they play it.

The Trump administration hasn't fully entered the money-printing rhythm yet. They're still laying the groundwork, testing various approaches to see which ones work. They're signaling they want to heat up the economy, throwing out various ideas to see which ones pan out. Once the Federal Reserve Chair and Board of Governors are finalized, for example, whether Trump can fire Powell and install his own people—which may not become clear until mid-next year—will become clear.

Once this is confirmed, they'll go on a money-printing spree from mid-2026 until the end of Trump's term. Without money printing, you can't win the election. Democrats and Republicans have to print money too. Otherwise, his supporters and allies won't benefit, so how can he get re-elected?

• Host: So you think this bull market could be prolonged. In other words, the traditional four-year cycle theory is invalid. Trump's money printing started a bit slowly, but once the policy takes full effect, this cycle could extend to 2027 or 2028?

Arthur Hayes: That’s right.

• Host: Wow, that's really amazing. You said ETH could reach $10,000–20,000, not this year, but in the next three to four years, right?

Arthur Hayes: Yes. But my baseline prediction is that we're bound to have a major bull market, and all financial assets tied to Trump's policies will benefit. This is because he has to win the 2026 election. Voters only care about their wallets: Am I richer today than I was yesterday? If not, I'll vote for someone else. So they chose Trump over Biden, and the same logic will apply to the 2026 congressional elections and the 2028 presidential election.

The Democrats will also clearly call for "printing money", and if the Republicans do not provide welfare, they will lose votes. Therefore, both sides will desperately release money.

• Host: Haha, you're almost making me want to vote Democrat. If they're going to throw money around, I only care about the money anyway.

Arthur Hayes: Yes, in the end it's a question of money, party affiliation doesn't matter.

ETH vs SOL

• Host: Ethereum has recently captured the narrative on Wall Street. It's like a perfect chain reaction. First, Circle went public, which far exceeded expectations and focused everyone's attention on stablecoins. Then, the stablecoin narrative naturally shifted to Ethereum. Then, Joseph Lubin and Tom Lee both publicly declared their support for Ethereum. As a result, Ethereum has become Wall Street's new darling. It has become a platform for "real-world assets." ETH also has distinct leaders. I call them "Batman and Superman"—Lubin and Tom Lee, one of whom speaks daily on CNBC, the other a founding member of Ethereum... My question is: if you could only put your money in one asset between now and the end of this cycle, would you choose Sol or Ethereum? Because until two months ago, everyone was predicting the decline of Ethereum, with almost unanimous support for Sol. Now, Ethereum has suddenly become the dominant force again.

Arthur Hayes: Honestly, both will rise. It's just a question of which will rise more. I'm a project advisor for Solana, so I certainly believe SOL will rise, but ETH is a much larger asset, and capital is pouring in faster. It 's going to be an interesting race between SOL and ETH. While one might rise faster, that doesn't mean the other will lose. They'll both rise.

• Host: From the perspective of position allocation, would you hold more ETH?

Arthur Hayes: Yes, I would prefer ETH.

The investment logic and collapse risk of crypto treasury companies

• Host: The shift in attitude on Wall Street is truly astonishing. What are your thoughts on these "crypto treasury companies"? Some people are hesitant about whether to hold ETH directly or buy shares in these companies, such as SBET or BMR, which sometimes trade at 1.8x or even 2x net asset value. Would you recommend crypto investors buy these stocks?

Arthur Hayes: The logic behind this trade is simple. You're essentially buying $1 worth of assets for $2 because you believe in the power of passive index funds. For example, I just had a meeting with the team at UPXI (a Solana treasury company), and I told them to research which indices might include their stocks, what mandatory buying rules the fund managers have, and what average trading volume, market capitalization, and exchange listing requirements must be met.

As long as these conditions are met, fund managers are forced to buy your stock, regardless of the company's actual performance. This is the MicroStrategy model, pioneered by Michael Saylor. They force capital inflows by entering various indexes.

• Host: Doesn't this create leverage risk in the market? For example, if you have $1 worth of ETH, and some companies are selling it for $2, there's a $1 worth of "air" in between. In Michael Saylor's case, he initially used the proceeds from bonds and convertible bonds to buy Bitcoin, which generated returns for shareholders while returning principal to bondholders. But now, most of the new generation of treasury firms have learned the lesson. They all say, "We don't want leverage," because Michael Saylor has proven that debt can be called, while different types of stocks don't have that risk. So, what's confusing me now is: why spend $2 to buy a $1 asset? I find it hard to find a reasonable explanation.

Arthur Hayes: The answer is simple: because you believe it will be included in the index. Passive fund managers don't care about price or net asset value. They buy when the system tells them to. They must buy all the shares before the market closes. They don't care whether it's $1 or $50,000.

• Host: I understand, but I still think this is risky. For example, if the market crashes one day, these companies' stock prices will plummet from 2x their net asset value to below it, and no one will buy them anymore. At that point, their existence will become meaningless, and they will be forced to sell off their underlying assets, which will lead to a "deleveraging crash" in the crypto market.

Arthur Hayes: (A crash) While theoretically possible, it's not so easy in practice. This is because these aren't ETFs, but companies. If management wants to force a deal, you'd have to buy enough shares, call a shareholder meeting, and force liquidation. This process is expensive and time-consuming, potentially taking years, and involves legal action.

So I am not too worried about the so-called “cascading crash.” Unlike ETFs, which can be redeemed on the same day, Treasury companies are more complicated.

• Host: But do you agree that by the end of this cycle, there will be many opportunities to buy these companies at very low prices, just like when Grayscale was discounted by 50%.

Arthur Hayes: Yes, but then it would take a long time and cost a lot to actually achieve arbitrage.

• Host: What I'm worried about is that not every team is Michael Saylor. When some companies can no longer bear it and start liquidating and selling crypto assets, that will be the end of this cycle.

Arthur Hayes: I agree. Some treasury companies may be acquired at a discount to their net worth, or their assets may be liquidated. The leading projects will passively absorb capital, while the laggards will be eliminated.

• Host: Which assets do you think are catching Wall Street's eye and worthy of establishing treasury companies? Obviously, BTC, ETJ, and SOL all have potential. I've also seen treasury companies around BNB, TON, HYPE, and ENA. How far do you think this trend will develop? Will it cover the top 100 tokens? Or the top 20? How much do you think Wall Street's current interest in cryptocurrencies is?

Arthur Hayes: As long as the market keeps going up—I don't know exactly what percentage the bankers are taking on these deals, but the sponsors are certainly taking 3%, 4%, or 5%—it's a great business for investment banks, and they will build treasury companies for all the assets as long as there is money to be made.

The selection and logic of altcoins

• Host: Let's talk altcoins. The last time I saw you at Dubai 2049, you told me to buy ETHFI, which ended up buying me a new house and paying my kids' tuition. So, what altcoins are you looking at now? For example, Ethena (ENA), are you still bullish on it? Their stablecoin issuance has doubled from 6 billion to 12 billion, and as market fees have risen, protocol yields have also recovered. It feels like they're doing a lot right.

Arthur Hayes: Yes. I have a macroeconomic rationale for stablecoins. I'll be speaking at WebX Japan next week and publishing an article there. My point is that people haven't fully grasped the concept of stablecoins. US Treasury Secretary Bensont is using stablecoins to reverse the trend of "de-dollarization"—that is, to redirect global offshore dollar flows back to the US while providing banking services to the so-called "Global South" (developing countries primarily in Asia, Africa, and Latin America), even if local regulations prohibit it.

Stablecoin issuers need to profit from interest rate differentials, so they use user funds to buy US Treasury bonds. Assuming that the circulation of US dollar stablecoins reaches $10 trillion by 2028, what does that mean? I'll discuss this in detail in my article.

Ethena's model is to package the "interest rate differential" in the crypto market into a stablecoin with its own inherent yield. Essentially, you're lending money to speculators (those who go long) and earning a return. This trading model has existed in the crypto market for over a decade, but the Ethena team packaged it into a DeFi product, making it accessible to everyone.

Therefore, I believe Ethena could earn hundreds of millions of dollars in interest annually through this process. If they start buying back tokens and ETH continues to surge, ENA's price will undoubtedly soar. My prediction is that Ethena will surpass Circle within the next 12 months, becoming the second most valuable stablecoin after Tether.

• Host: That's a bold prediction, and I agree with your analysis. Now, let me ask: In reality, there will be a plethora of stablecoins, such as PayPal USD, USDT, USDC, Ethena, and Stripe. Why do people keep switching between them? In what scenarios would you trade USDT for USDC or PayPal USD?

Arthur Hayes: The key isn't exchange, but distribution. Social media platforms are the "tip of the spear." Who will open accounts for those who haven't yet accessed the US dollar? The answer is Facebook (Meta) and X (Musk's Twitter). They will launch wallets. The winning stablecoin will then depend on the distribution capabilities of these platforms.

• Host: You didn't mention Telegram? It has 1 billion users.

Arthur Hayes: Telegram's chain seems a bit sham to me, with little real activity and legal complications. I don't think the US government would hand over the distribution of its "dollar policy" to Telegram. It's more likely to be handed over to "American capitalists" like Musk and Zuckerberg, who pay taxes, donate, and are controlled.

For example, Filipinos desperately want to use US dollars, but local regulations prevent Citigroup and JPMorgan Chase from directly serving them. The Trump administration could then support WhatsApp's launch of "USDT payments," allowing Filipinos to receive US dollar remittances directly on WhatsApp. This kind of "dollarization" is unstoppable.

Once everyone has stablecoins, the next step is spending. For example, buying coffee at a 7-Eleven or swiping a credit card at a convenience store might not work overseas, but Ether.fi works perfectly. I have the Etherfi app on my iPhone and a physical card, and I can swipe them anywhere. When hundreds of millions or even billions of people get their hands on USD stablecoins through Facebook and X, they'll also need ways to spend them. Ether.fi can meet this demand and help people spend their stablecoins.

• Host: Okay, what about Hyperliquid? What's your logic?

Arthur Hayes: I believe Hyperliquid will become the world's largest exchange, surpassing Binance. This is because once stablecoins become popular, they will attract a large number of new users. Their only way to hedge against inflation is through speculation, and the place for speculation is on-chain derivatives exchanges. Hyperliquid offers low-cost, highly liquid contracts and repurchases 97% of its profits, directly returning them to users.

For example, projects seeking to launch typically pay 7%-10% of their tokens to centralized exchanges (such as Binance) as a listing fee. However, on Hyperliquid, they pay virtually nothing and gain immediate liquidity. This eliminates the need for projects to "give away" their tokens to centralized exchanges. As a result, Hyperliquid will gradually dominate the new issuance market.

• Host: I understand. In the past, I'd invest in smaller altcoins to maximize returns, but this time I've chosen to focus on leading projects like ENA and LINK, adding a bit of leverage. I think this offers a better risk-reward ratio.

Arthur Hayes: Yes, I now only invest in projects that can generate real cash flow. I no longer pursue a thousand-fold return, as that would mean having to bear the brunt of a slew of projects that have gone to zero. I simply want to be able to hold onto my investment with confidence even after large capital comes in. For example, Hyperliquid repurchases 97% of its profits, EtherFi has already started doing so, and Ethena will soon launch its own. The profits from these protocols are distributed directly to our token holders, rather than being retained by the protocol teams.

Host: I agree with your logic. What about Chainlink? It's suddenly become a new darling on Wall Street lately. Is it on your radar?

Arthur Hayes: Honestly, I don't really pay much attention. I haven't done much research on oracles, and I'm not sure if their current focus is still solely on oracles.

NFTs and CryptoPunks

• Host: Okay, before I let you go, I have to tell you that I finally bought a CryptoPunk. Even though I said "I'd never buy one" before, you and Raoul Pal were both saying that CryptoPunks would outperform ETH, so I couldn't help but buy one. Are you still bullish?

Arthur Hayes: Absolutely. Beyond the necessities of life, everything humans do is a status game. Real-world status symbols are art, luxury cars, and large houses; online, they are these scarce, story-telling digital collectibles. CryptoPunks are the most iconic NFT project, and their status is irreplaceable. That's why I absolutely have to own CryptoPunks; they're always the first, and they have excellent liquidity, making them the most marketable NFT series.

When ETH reaches $20,000, there will be a lot of wealthy people who need to show off their status. They might not show off their designer belts, but instead say, "Look, I have a CryptoPunk. I spent millions on a pixelated avatar." This is the new status symbol.

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The following are all discussions about personal life and greetings, so I will not translate them here. If you are interested, you can watch the original video directly.