Maelstrom’s chief investment officer, Arthur Hayes, has created one of his most audacious predictions for Bitcoin, predicting that his assets could reach $3.4 million within three years.
In a note on September 23, he stressed that his predictions depend on the possibility that Donald Trump’s administration will embrace offensive financial expansion through yield curve control.
According to him:
“Between now and 2028, the Treasury must pay off old debts and issue new debts to fund the government’s deficit.”
Hayes explained that US financial pressures are set to intensify, with an annual deficit of around $2 trillion by 2028.
That shortage, coupled with the need to refinance mature debt, could encourage the issuance of new Treasury Departments of more than $15 trillion over the period.
Meanwhile, Hayes expects the Fed to step in as the main buyer of these debts.
Hayes noted that US authorities have absorbed about 40% of government borrowing to stabilize the market during the Covid-19 crisis. He expects the same scenario to occur now, as foreign investors are less willing to fund U.S. obligations.
According to him:
“We believe that the Fed will buy more than 50% of the debt issued, because today we know that Trump will issue a large amount of it, so we will buy the Treasury debt because there are even fewer foreign central banks.”
He combined the credit creation by the Fed and banking sectors and estimated that if it occurs it could swell up significantly.
With this in mind, Hayes linked this liquidity stream directly to Bitcoin valuation and estimated a gradient of 0.19 for BTC price increases per credit growth.
He says that all printed materials will bring in significant close proximity to the multi-million dollar range and top ciphers that are significantly closer to the $3.4 million forecast.
Despite the bold predictions, Hayes calmed expectations by acknowledging that Bitcoin may not have reached $3.4 million. Instead, he emphasized that orientation is more important than accuracy.
He said:
“My goal is to get the direction of my trip right and be sure I’m betting on the fastest horse, assuming that Trump is serious about printing trillions of dollars to achieve his policy goals.”
As of press time, Bitcoin is trading at nearly $112,927, roughly 9% below its August history high of $124,167. Encryption data.
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