Wars, Debts, and Inflation: Bitcoin and Ethereum Year-End Price Predictions

Arthur Hayes, co-founder and former CEO of BitMEX, argues that escalating global conflicts and rapidly increasing government debt will trigger a historic surge in the cryptocurrency market. According to Hayes, Bitcoin could reach $250,000 and Ethereum could hit $10,000 by year-end.

In his analysis published on July 23, Hayes stated that growing military expenditures and strategic investments worldwide are pushing the US economy into a war-like credit expansion. He believes that the liquidity injected into the market by central bank interventions is flowing into scarce, limited-supply assets, particularly cryptocurrencies.

Inflation: Not a Threat, But an Opportunity

Hayes asserts that inflation should be seen not as a threat, but as an opportunity to fuel the crypto market. Ongoing conflicts in Ukraine and the Middle East, coupled with rising defense budgets—especially the US’s defense spending exceeding $1 trillion in 2024—indicate that governments are increasingly resorting to borrowing. Public spending, financed by central bank balance sheet expansion rather than tax increases, is intensifying inflationary pressure. Hayes points out that as real interest rates are pushed into negative territory, inflation will re-emerge, predicting that cryptocurrencies will gain the most value in this environment. While price increases on essential needs like food and housing negatively affect broad segments of society, the rise of assets like Bitcoin and Ethereum can continue without drawing similar backlash.

Hayes contends that crypto is one of the rare areas where excess money can be directed and gain value without creating economic imbalance. For this reason, he describes cryptocurrencies as the “ideal escape valve.”

Increasing Political Support and Institutional Interest

On the regulatory front, developments are also favoring the crypto market. According to Hayes, growing bipartisan political support in the US, the diversion of pension funds into digital assets, and strengthening interest from institutional investors could trigger a new wave of adoption in the sector.

Should Donald Trump return to the presidency, the clarification of regulations and the implementation of crypto-friendly tax advantages could further accelerate this process.

In summary, Hayes’s core argument is that while the supply of fiat currencies is rapidly increasing, the fixed supply of cryptocurrencies makes them attractive for long-term investment.

Do you think these geopolitical and economic factors will indeed drive cryptocurrencies to new all-time highs by the end of the year?

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