Wealth Magazine Interview with Arthur Hayes: When Will Altcoins Take Off? Will Ethereum Make a Comeback?

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Why Arthur Hayes is Bullish on Bitcoin

When will altcoins take off? Does ETH have more rebound potential than SOL?

Gold occupies 20% of the portfolio, optimistic about gold prices rising to $10,000 to $20,000

Why does he believe Ethereum will bounce back?

Views on Trump and the future of Bitcoin

Hayes stated that the U.S. Treasury has recently bypassed the debt ceiling by consuming the “General Account” (TGA) and utilizing “extraordinary measures,” resulting in actual expenditures exceeding the recorded borrowing amount. He pointed out that the TGA balance has decreased from $750 billion to $450 billion this quarter, indicating that the government has spent an additional $300 billion without issuing new debt.

“This is perplexing because we are currently in a debt ceiling period. Although the government cannot net borrow new money, it continues to spend through various channels,” he added. In the first quarter of this year, the U.S. Treasury’s actual borrowing was 22% higher than the same period last year, which implies a higher deficit.

What are the consequences of this deficit expansion? He believes: “The government will ultimately have to issue more national debt, thereby injecting more liquidity into the market through the banking system, leading to an increase in the circulation of the dollar globally. This is a positive signal for asset prices, especially Bitcoin.”

Arthur Hayes expressed that he believes Bitcoin bottomed out on April 9 and will continue to rise due to monetary easing.

When asked when the altcoin bull market will start, Arthur Hayes stated: “Bitcoin needs to break through $110,000 first, and then with continuous volume increase, it can fall to $150,000 to $200,000. This situation may occur in the summer or early third quarter of this year, at which point funds will start shifting to other cryptocurrencies.”

As to whether this round of altcoin activity will be as frenzied as in 2021, Arthur Hayes believes it is unlikely to replicate the “hundredfold surge” of that year. He pointed out: “We will have new narratives and themes that rise sharply, but those old coins with high FDV (Fully Diluted Valuation), low circulation, no customers, no revenue, and listed only on a few centralized exchanges are unlikely to rise again.”

Regarding which investments he deems worthy of deploying capital, Hayes stated: “They must be able to outperform Bitcoin’s returns; otherwise, there is no reason not to hold BTC directly.”

When discussing hedging asset allocation, Hayes also revealed that he has been investing in gold for a long time. “I have physical gold stored in a vault, and I also hold a significant amount of gold stocks. I believe that gold stocks are still undervalued at present, and central banks around the world are actively buying gold, which will drive up gold prices.”

He further noted: “I believe the U.S. will re-evaluate its official gold reserve valuation, thereby devaluing the dollar relative to gold. Therefore, I think this wave of gold prices could rise to $10,000 or even $20,000.”

Arthur Hayes estimates that about 20% of his current asset allocation is in gold.

On the question of whether ETH or SOL has more potential, Arthur Hayes surprisingly favors Ethereum: “Because it is currently unpopular. Everyone says Ethereum hasn’t done well, but in fact, it still has the most Total Value Locked (TVL), the most developers, and remains the safest proof-of-stake chain.”

He acknowledged that Ethereum’s price has performed poorly from 2020 to the present, but pointed out: “If I were to invest new funds now, I believe ETH will outperform SOL in the upcoming bull market over the next 18 to 24 months.”

When asked about expectations regarding Trump’s policies, Arthur Hayes believes: “The Trump administration will do some things that are friendly to cryptocurrencies, but that doesn’t mean your coins will necessarily rise, nor will it happen according to your expected timeline.”

“Everyone’s expectations are too high. Trump is a politician; he has many things to attend to, and cryptocurrency is not his top priority. Investors need to be more patient.”

He reiterated his previous prediction: “By the end of Trump’s term in 2028, Bitcoin will reach $1 million.” As for this year’s market target, Hayes believes: “Bitcoin has the opportunity to challenge $200,000 in this wave of increase, and by the end of the year, it could reach $250,000, after which the alt season will fully unfold.”