BitMEX co-founder Arthur Hayes is betting that U.S. politics, not crypto fundamentals, will drive the next major market for Bitcoin (BTC), arguing that a victory for the Republican Party (or “Team Red,” as he calls it) in 2028 all but guarantees aggressive money printing as long as gas prices are kept in check.
summary
- Mr. Hayes offers what he calls the “10% rule.”
- He links rising fuel prices to election losses.
- Bottom line: President Trump’s political motivations point to more accommodative fiscal and monetary policies — conditions that Hayes says are historically bullish for Bitcoin and other risk assets.
Hayes’ paper, detailed in a blog post, focuses on U.S. gas prices. Control of one or more branches of government is typically reversed if the national average gasoline price increases by more than 10% in the three months before an election compared to January levels, he argues.
To avoid such an outcome in 2028, Hayes said President Trump must “revitalize the economy” without allowing fuel prices to skyrocket.
The two elections that concern US President Trump are the November midterm elections and the 2028 presidential election. Although he himself is not running for re-election in 2026 and cannot run for a third term in 2028, the collective loyalty and obedience of his political supporters depend on his chances of re-election. All of the defections from MAGA’s shabby tent are due to worsening views about their future electability if they continue to do as President Trump demands. What can President Trump do to ensure that the median voter who has not yet decided whether they are a Team Blue Democrat or a Team Red Republican shows up in November 2026 and 2028 and votes the “right way”?
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The path for policymakers is narrow
Hayes said lawmakers must expand credit and nominal GDP while keeping oil prices in check. If oil prices rise too quickly, there is a risk that U.S. Treasury yields will rise, bond market volatility will increase, and politicians will be forced to rein in stimulus, something Hayes believes President Trump does not want.
“The basic scenario is that oil prices do not fall completely and will continue to subside unless Trump and Buffalo Bill Bessent print money like they did in 2020, as the market initially believed that U.S. control of Venezuelan oil would significantly increase the amount of oil pumped per day,” Hayes wrote.
He said the availability of supplies was secondary to the political imperative of keeping inflation-sensitive voters calm.
Hayes cited the 10-year Treasury yield and the MOVE index, a measure of bond market volatility, as key signals. When yields approach 5% and volatility spikes, leveraged financial markets tend to collapse, forcing policymakers to retreat. He cited last year’s tariff scare, which spiked bond volatility and sold off the market, as an example of how quickly political pressure can reverse policy.
Bitcoin is unique
Against this backdrop, Hayes argues that Bitcoin stands out from traditional assets. He says that oil prices are not directly relevant to Bitcoin, but to the fiat market, as all Bitcoin miners face the same energy price fluctuations at the same time. Instead, the price of Bitcoin primarily responds to liquidity expansion and currency depreciation.
“Nothing can stop this train,” Hayes wrote, echoing analyst Lynn Alden in describing a mutually reinforcing cycle of deficit spending, Treasury issuance, and central bank bond purchases. He expects Bitcoin and some cryptocurrencies to soar as the supply of dollars increases.
Hayes also outlined his trading strategy for 2026, saying his company Maelstrom is running near-maximum risk exposure with minimal stablecoin holdings. He plans to continue accumulating BTC while rotating capital into privacy-focused tokens and decentralized finance businesses, which he believes will outperform if credit growth continues.
The bottom line, Hayes said, is that political incentives favor stimulation over restraint, especially during election cycles. For investors, he says, that simplifies the macro case: stay constructive on risk assets and stick with Bitcoin for the long haul.
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