- Arthur Hayes warns US Treasuries risk losing top reserve asset status due to debt/tariffs
- Hayes predicts Gold, Bitcoin benefit as neutral assets if Treasury demand falls
- Bitcoin $1M target possible via forced Fed easing & potential USD/CNY turmoil: Hayes
Co-founder of BitMEX Arthur Hayes warns that U.S. Treasuries may no longer hold their position as the world’s top reserve asset.
In a post on X, he says America’s expanding debt, coupled with changing trade policies and rising global tension, could push investors toward gold and Bitcoin.
Decades of Debt & Trade Shifts Set the Stage
Hayes points to the sharp rise in U.S. federal debt since the gold standard ended in 1971, using a St. Louis Fed chart showing an 85-fold increase.
Hayes says this expansion reflects the credit needed to support the global economy as the U.S. dollar took center stage in trade and finance.
Related: The Unexpected Upside: Tariffs Depress Treasury Yields, Shine Light on Crypto
He noted that this debt-driven growth has produced uneven results. Some Americans gained wealth, while others saw few benefits. Hayes argues that this divide fueled political discontent, leading to the election of Donald Trump by those who felt excluded from decades of economic expansion.
Trade Realignment Could Hit US Assets
Trump’s push to reduce the U.S. current account deficit via tariffs could backfire, Hayes stated. If foreign nations earn fewer dollars through trade, they might be forced to sell existing U.S. Treasury and equity holdings to support their own economies, rather than recycling dollars into buying more U.S. assets.
Hayes added that even if tariffs ease later, policy uncertainty might deter foreign reliance on the U.S. financial system long-term.
Gold & Bitcoin Favored as Neutral Alternatives
Given this potential instability, Hayes believes gold will re-emerge as a preferred neutral reserve asset, as it’s untethered to national policies like tariffs and tradable globally. He anticipates central banks increasingly using gold for international trade settlement.
He also highlighted Bitcoin as a digital alternative store of value, likely gaining appeal as trust in traditional financial systems weakens.
Related: Bitcoin Not Suitable for Reserves, Says South Korea’s Central Bank
Hayes Sees Path to $1M Bitcoin via Currency Turmoil
Hayes predicts these macroeconomic shifts, particularly potential currency turmoil between the U.S. and China, could ultimately launch Bitcoin’s price to $1 million.
He specifically forecasts the USD/CNY exchange rate reaching 10.00, driven by political pressures and Beijing’s policy resistance, calling this currency shift a potential “super bazooka” for Bitcoin. Hayes plans to elaborate on the USDCNY dynamic in a future essay.
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