Arthur Hayes: Money printing is about to accelerate, investors should boldly increase their holdings of crypto assets

On April 24th, BitMEX co-founder Arthur Hayes wrote that the current crypto bull market has only just begun and investors should boldly turn left (LeftCurve), holding and increasing positions. Hayes pointed out that 2024 is a critical year, with several major countries holding presidential elections. Especially in the United States, the current ruling Democratic Party will spare no effort to win re-election and reverse the policies of the Republican Party. In an election year, if the public feels that the economy is in a recession, the probability of the incumbent president's re-election will drop from 67% to 33%. Therefore, the ruling party that controls monetary and fiscal policy can simply increase government spending significantly, push up the nominal GDP growth rate, and create a false impression that the economy is not in a recession.

Data shows that US government spending accounts for 23% of nominal GDP, which means that as long as the government is willing to borrow money, nominal GDP can be manipulated at will. According to forecasts from the Congressional Budget Office (CBO), regardless of whether Biden or Trump takes office, the future US government's fiscal deficit will continue to expand. In addition, geopolitical conflicts around the United States are escalating, and politicians are also happy to continue providing billions of dollars in aid to allies.

Hayes emphasized that as long as the government can borrow at interest rates lower than nominal GDP growth, politicians will continue to increase spending. Therefore, in the future, the scale of currency printing will only become more exaggerated. He suggested that investors take advantage of the recent opportunity to slowly build positions in cryptocurrencies. As the volatility of the crypto market will decrease with the arrival of the northern hemisphere summer, this is an excellent entry point for non-pre-sale round investors. Unless real interest rates turn positive, investors should remain optimistic and let the winners continue to run wild.