Recently, the significant decline in the price of Bitcoin has raised concerns among investors and market analysts.
Despite this recent downturn, Arthur Hayes, co-founder and former CEO of BitMEX, proposed a perspective that may reassure Bitcoin enthusiasts. Hayes discussed historical economic cycles and their impact on Bitcoin as a safe asset.
He classified historical economic cycles into local inflation cycles and broader global ones. The co-founder of BitMEX characterized the current economic environment as a local cycle marked by major geopolitical changes and monetary policy shifts.
Within this cycle, Hayes pointed out the transition from a unipolar world dominated by the United States to a multipolar one with emerging powers such as China, Brazil, and Russia. He emphasized that governments are increasingly resorting to financial repression and large-scale money printing to finance deficits, which negatively affects asset valuation and wealth preservation.
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During such periods, Hayes argues that Bitcoin performs better than traditional assets. Unlike gold, which relies on nature to maintain its accounting ledger and has slow physical transfers, Bitcoin’s accounting ledger is maintained through blockchain, enabling fast transactions. According to him, this makes Bitcoin a more attractive safe asset than gold in a local cycle environment.
Lastly, he added:
“Bitcoin is better, while gold is worse. That’s why Bitcoin has stolen some of gold’s thunder from 2009 until now.”
