"I believe in the long-term potential of a certain asset, but in the short term, my goal is to maximize my Bitcoin holdings."

Organized & Compiled: Deep Tide TechFlow

Guest: Arthur Hayes

Host: Michael Jerome

Podcast Source: threadguy

Original Title: Arthur Hayes: BTC Price Targets, Trading Advice, Bear Market and More | TG Podcast

Broadcast Date: November 15, 2025

Highlights

• I am very optimistic about the current market. Bitcoin is one of the best-performing assets in human history.

• For investors who are patient, have cash, and can avoid using high leverage, now is a very good time to invest.

• The current market performance is more a result of investors' impatience and the consequences of excessive leveraged trading.

• Many family offices are also looking for VC funds to invest in because they enjoy the interaction with bankers and institutional fund managers, like being sought after, and enjoy participating in those ceremonial meetings and events. It is this psychology that makes them willing to invest in these underperforming funds.

• All investment operations are aimed at obtaining returns, and these returns will ultimately translate into more Bitcoin holdings.

• Zcash is the last project in the cryptocurrency space that has the potential to achieve 1000x returns.

• Ultimately, I decided to continue increasing my position in Zcash. I believe it has the potential to reach 20% of Bitcoin's value. Currently, my investment plan is nearing completion, but if the price pulls back, I might buy some more.

• If any politician publicly declares that they will adopt tightening policies similar to those from 1929 to 1930, that will be a signal for me that my bullish view is invalidated.

• Gold and silver are tools used by nations to resist the devaluation of fiat currency, while Bitcoin and some selected cryptocurrencies are weapons for people to combat inflation.

• The best investors can accept two seemingly contradictory views at the same time. I believe in the long-term potential of a certain asset, but in the short term, my goal is to maximize my Bitcoin holdings.

• My advice to newcomers is to set aside those "high-risk get-rich-quick" ideas. You can observe your emotions and understand this eager mentality, but do not let it control you.

Arthur Hayes Discusses the Game Between Grassroots Cryptocurrency and Venture Capital (VC)

Host: Do you think there is a disconnect between cryptocurrency venture capital (VC) and the on-chain liquidity market?

Arthur:

I don't think it's a matter of disconnect, but rather a matter of incentive mechanisms; the behavior of these investors is entirely determined by their incentive structures. If they need to achieve returns through limited partners (LPs) and must charge management fees in some way, they will naturally operate according to the crypto VC model. In this model, the performance of most crypto venture capital funds often lags behind Bitcoin and Ethereum, depending on the type of fund.

In fact, the performance of traditional venture capital funds is not optimistic either. Aside from large well-known funds like Andreessen Horowitz (a16z) and Sequoia, many VC funds do not actually make profits, and their returns even underperform the S&P 500, let alone the Nasdaq. Instead of paying high management fees, it would be better to directly purchase an ETF, which can outperform 99% of VC funds.

I remember mentioning this to a high-net-worth individual. He was an investor from a family office, and as a member of the family, his colleague asked me why they still invest in these mediocre VC funds. They always talk about finding "the next hottest VC fund." I understood this, but ultimately he admitted that it was more about the "atmosphere." They enjoy the interaction with bankers and institutional fund managers, like being sought after, and enjoy participating in those ceremonial meetings and events. It is this psychology that makes them willing to invest in these underperforming funds. They feel that this is the meaning of being an investor: to be recognized and praised.

So, in a sense, these VC funds may seem disconnected from the market, but for theirtarget audience, they are actually meeting these investors' psychological needs, rather than just pursuing financial returns.

Who is Arthur Hayes?

Host: I would love to hear your story. Many viewers watching this live stream may be the new generation of cryptocurrency enthusiasts, like those who followed Solana, Meme, or Axiom Crew in 2024. Could you briefly introduce yourself?

Arthur:

Of course! I got into cryptocurrency in 2013. Before that, I worked as an ETF market maker at Citibank and Deutsche Bank in Hong Kong. Later, I became unemployed. In the spring of 2013, I happened to read the Bitcoin white paper when Bitcoin was priced around $200. This white paper deeply moved me because I have always been interested in gold and was concerned about how the Federal Reserve and the global banking system were undermining the value of currency through monetary policy. These issues were also touched upon in my business school studies. The concept of cryptocurrency made a lot of sense to me, and as someone who loves financial history, I was incredibly excited because I believed cryptocurrency could be as important as the invention of the printing press.

At that time, I was fortunate to read this white paper after becoming unemployed, and with some savings and help from friends, I decided not to look for a traditional job but to try to enter the cryptocurrency space. Thus, I conceived the idea of creating a Bitcoin and cryptocurrency-related business, which led to the birth of BitMEX.

My goal was to build a derivatives exchange that I, as a trader, would want to use. Later, I co-founded BitMEX in 2014 with two co-founders, Ben Delo and Samuel Reed. In 2016, we launched perpetual contracts, a financial derivative that changed the industry rules. By 2018, BitMEX had become one of the largest cryptocurrency exchanges in the world.

Afterward, I went to prison due to charges from the U.S. government but was later pardoned. Now, I have returned to the market, focusing on managing my own funds. We founded Maelstrom, a company focused on early-stage token investments and providing advisory services. Some of our successful cases include Ethena and EtherFi, as well as some liquidity trading projects. You may occasionally see me promoting my investment projects on X. We are also launching a private equity investment tool to invest in emerging small but very important cryptocurrency infrastructure projects.

How to Position the Market and Understand the Mindset of Leverage Trading

Host: How do you currently position the market? How do you feel when you see Bitcoin drop to $98,000?

Arthur:

At Maelstrom, we currently have about 98% of our funds invested in the market. Although we still hold some cash, the impact of market fluctuations on us is minimal due to the low cost of most of our investments, so I remain relatively calm about market changes. Moreover, we do not use leverage, which allows me to assess market trends more calmly.

I know many listeners may hold some leveraged positions, especially long positions in Bitcoin or other cryptocurrencies. I understand that this situation can be very stressful because using leverage requires not only accurately judging market direction but also precisely timing entry and exit. More importantly, leveraged trading also incurs periodic funding costs, which often leads traders to change strategies due to short-term fluctuations, such as "the performance over the past 24 hours has not been good; should I adjust my strategy?"

This psychological pressure is especially evident during significant market fluctuations. For example, when you are bullish on the market but find that the price has only risen by 1% or 2%, or even when the macro environment seems favorable, Bitcoin breaks below the psychological threshold of $100,000. At this point, those holding leveraged positions may feel anxious, not only because of holding costs but also due to a lack of sufficient patience or ability to stick it out. This is the biggest challenge of leveraged trading.

I understand why some people choose to use leverage. For many who hope to quickly improve their financial situation, time and funds may be very limited, so they hope to achieve quick returns through leverage. However, once the market does not develop as expected, this strategy often leads to anxiety or even losses.

From a macro perspective, I believe the current economic environment is very favorable for cryptocurrencies. I am still buying some assets, mainly Zcash. Although the overall market has not yet entered the "altcoin season," if you have been paying attention to high liquidity assets and Zcash over the past 18 months, your performance should have been quite good. While most other coins have underperformed, the overall market is still on an upward trend. Therefore, I am very optimistic about the current market.

I believe that for those who are patient, have cash, and can avoid using highleverage, now is a very good time to invest. If we look back at November and December 2021, the market was at historical highs, investor sentiment was high, and everyone was very optimistic. At that time, the central bank's statements mainly focused on inflation issues. For example, the Federal Reserve clearly stated that it needed to slow down the economy and announced plans to start raising interest rates in March 2022. If you look at the interest rate hike cycle chart from that time, the curve was clearly upward.

However, comparing to today's situation, it is evident that the market environment has changed significantly. Credit growth has stagnated, and Federal Reserve officials have begun discussing the issue of insufficient reserves in the system, even considering restarting quantitative easing (QE). If you look at the current central bank's easing or interest rate hike cycle charts, you will find that most central banks are now cutting rates rather than raising them.

From a political perspective, the current discussions are more focused on hot topics like artificial intelligence and immigration. Politicians in various countries are promising to provide various benefits to voters, such as "free services" or "additional benefits," but almost no one mentions universally increasing taxes. While some have proposed raising taxes on the wealthiest 1%, this is more of a strategy to cater to voters rather than a real fiscal solution. The real strategy of politicians is to print money to fulfill these promises rather than raise taxes. Therefore, the likelihood of credit contraction in the next 12 to 18 months is almost zero. This stands in stark contrast to the policy environment during the market peak in 2021.

The current market does seem a bit weak, as we are in a transitional phase, especially with the Federal Reserve and the People's Bank of China gradually increasing monetary easing. In the U.S., the presidential election is approaching in 2026. The Republican Party (red team) has recently performed poorly in several important elections in states like New York and Virginia. As an experienced politician, Trump knows what measures need to be taken to win the election. The Republican Party's "economic stimulus" may focus on artificial intelligence, data centers, arms production, and mortgage relief, while the Democrats are more inclined to promote climate change policies, social justice projects, and free meals and public transportation services. Despite the differing policy focuses of the two parties, they are essentially both supporting their respective voter bases through money printing. For cryptocurrency investors, this ongoing expansion of the money supply is the lifeline of the market.

Whether it’s “socialism,” “industrial nations,” or “capitalism,” these are just different political wrappers aimed at attracting different voter support. But ultimately, their core strategy is to pay for these promises through money printing rather than increasing taxes. This "inflation tax" is essentially the only politically feasible way to address the massive debt accumulated over the past 40 to 50 years.

For this reason, I am very optimistic about the current market. A simple reading of the news reveals these trends. I do not need to rely on complex indicators, magic charts, or technical analysis tools; just observing the policy directions that politicians are pushing is enough to judge future investment opportunities.

What Conditions Could Lead to Arthur's Bullish View Being Invalidated?

Host: So, what are the conditions under which you would consider your bullish view to be invalidated?

Arthur:

If any politician publicly declares that they will adopt tightening policies similar to those from 1929 to 1930, that will be a signal for me that my bullish view is invalidated. Let me give you an example: the U.S. Secretary of the Treasury at that time, Andrew Mellon, was a well-known banker who proposed an extreme economic viewpoint in the early stages of the Great Depression. His core idea was "liquidate credit, liquidate capital." What he meant was that those who lived lavishly through borrowing should pay the price, the system needed to be reset, and all bad debts must be cleared away; only then could the economy return to a healthy state.

Of course, his original words were more succinct than my paraphrase, but the core idea is: if someone has borrowed a large amount of credit but has not generated enough income to support that debt, then they should go bankrupt, rather than being bailed out by the government. It was this policy that led to a significant contraction of credit in the early 1930s, directly triggering the Great Depression. This history is recorded in economics textbooks. The result was that this policy was extremely unpopular, leading to then-President Hoover's crushing defeat in the next election.

Therefore, if today any politician, whether a "communist" in China or a leader in the U.S., or even politicians from other countries, openly advocates similar tightening policies, such as allowing credit to decline and no longer bailing out failing businesses, then that would be a significant signal. However, I have not yet seen such signs. In fact, in any G7 country, there are no major politicians willing to take such a stance. The only exception might be Argentina's Milei, but Argentina's economic scale is too small to have any substantial impact on the global market.

In G7 countries, politicians are reluctant to adopt tightening policies because it would bring enormous social and economic risks. A large-scale contraction of credit could lead to skyrocketing unemployment rates and would also cause many wealthy individuals to lose their wealth. Such an outcome is unacceptable in democratic elections, as voters would not support such policies. Even in non-democratic countries, it is difficult to gain support within the regime.

Why Are Cryptocurrencies Underperforming Right Now?

Host: Why are cryptocurrencies underperforming in the current market environment?

Arthur:

If you bought Bitcoin in January 2025, the current price may be about the same as it was then, or even slightly down. If you invested in some altcoins, you might be facing larger declines. But if you bought Bitcoin two years ago, your investment return is positive. If you bought Bitcoin during the so-called "Liberation Day" period from April 9 to 11 this year, your returns are around 30% to 44%.

So, if you have only recently entered the cryptocurrency market or just opened leveraged positions, I completely understand that you might feel at a loss, but we should look at Bitcoin's performance from a longer time perspective. Bitcoin is one of the best-performing assets in human history. The problem is that if you are new to Bitcoin or hope to achieve returns in the short term, you might feel that the market is not developing as you expected. But in reality, the market does not cater to your time frame. I believe that the current market performance is more a result of investors' impatience and the consequences of excessive leveraged trading.

Many people do not realize that at certain times, other assets may temporarily outperform Bitcoin, but in the long run, as long as the currency continues to depreciate, Bitcoin will still be one of the best-performing assets. Moreover, we will also see some specific altcoins perform even better than Bitcoin. However, if you simply choose a random three-month period to measure investment performance, the results may be as random as rolling dice.

Arthur:

I am not currently focused on leveraged trading. Of course, there is nothing wrong with using leverage. If you want to be a leveraged trader, you must remain highly vigilant about the market. For example, it is difficult to get a full eight hours of sleep every night because you need to stay updated on market dynamics and set phone alerts. You also need to understand changes in open interest, grasp time series data, and analyze global capital flows, especially trading conditions in Asia, Europe, and North America.

These are the basic skills required to become a successful leveraged trader. If you cannot do these things, it is best not to attempt leveraged trading lightly, as you have not invested enough effort. Leveraged trading requires constant focus, 365 days a year, without slackening, if you want to succeed. But if you are just casually opening a few positions after work, hoping to make some quick money, you are likely to get into trouble. Again, leverage itself is not the issue; the key is whether the trader has enough focus and expertise.

Host: We all know you have a unique perspective on the "catch-up trade" between Bitcoin and gold. You believe there is a significant difference in how the market perceives gold compared to Bitcoin. I am curious how you view this issue now. For those who still focus on Bitcoin catching up to gold, how do you think it will develop in the future?

Arthur:

In my non-crypto investment portfolio, almost 100% consists of investments in physical gold and silver mining. If I were to discuss my investment logic, my core view is that Bitcoin is a tool for people to combat currency depreciation. Anyone can own Bitcoin, and no one will know you have it. We can even memorize the private key, which is a very unique way.

But for central bankers, they face similar issues. If you are not a central banker in the U.S., you need to ensure that the reserve assets of your country or economy can withstand the inflation driven by the U.S. For the past 10,000 years, whether for nations or individuals, gold has been the preferred asset to address this issue.

So, if I were a central banker or government official, I would choose gold to protect myself from asset confiscation or inflation. Gold is a historically proven solution. In contrast, Bitcoin has only existed for 15 years, while gold has a 10,000-year history. Choosing gold is not only about its stability but also because it aligns with traditional institutional perceptions. As an official of a sovereign nation, if I choose Bitcoin and it fails, I might lose my job. But if I choose gold, even if something goes wrong, I can say, "This is our usual practice."

Moreover, the storage of gold is more traditional and reliable. We have vaults and armed personnel to protect it, without needing to understand complex cryptography or private key management. In contrast, the custody and security of Bitcoin require new technologies and knowledge, which is a huge barrier for many governments. Therefore, when I see the U.S. confiscating Russian assets, I realize that any country could face the same risk. To avoid this situation, I would choose to store gold within my country's borders, protected by my own military.

Of course, as an individual, I might hold Bitcoin and believe in its value. But from a national perspective, gold remains the safer choice. Therefore, in my investment strategy, I hold both assets: gold and silver are tools used by nations to resist the devaluation of fiat currency, while Bitcoin and some selected cryptocurrencies are weapons for people to combat inflation.

The two may perform differently, but their core logic is similar, both aimed at addressing currency depreciation. It’s just that their buyer demographics differ—gold is primarily purchased by nations, while Bitcoin is the choice of the people. This is also why I hold both. I believe that we should not view gold and Bitcoin as oppositional but rather as complementary. If you look at the largest buyers of gold since February 2022 (when the U.S. confiscated Russian funds)—it has been central banks. Do you think this trend will continue? Do you think there will be more conflicts and divisions in the future? If the answer is yes, then buy gold, because nations will continue to accumulate it.

On the other hand, if you believe that countries will continue to solve problems through money printing, leading to inflation, then buy Bitcoin, as it is the people's currency and a way to combat inflation in the digital interconnected age. I believe that both gold and Bitcoin can allow me to profit from these two trends. That is my view on gold. It is not an either-or choice, but rather both. While my cryptocurrency holdings may be higher, gold is also an indispensable part of my investment portfolio.

The Story of Naval Pitching Zcash to Arthur

Host: You both hold Bitcoin and gold, which makes for an interesting investment portfolio. I can understand why someone like Naval would choose Bitcoin over traditional gold. Next, let’s talk about Zcash. I’ve heard you mention Naval’s story a few times; could you share it? What sparked your interest in Zcash? I remember you said that BitMEX was the first exchange to list Zcash, right?**

Arthur:

Yes, BitMEX was the first exchange to launch Zcash futures contracts. Around 2016, Zcash was one of the hottest coins in the market. Zuko (the founder of Zcash) was promoting it everywhere, and there was a lot of high expectations for privacy technology, with the belief that Zcash could make Bitcoin more private.

At that time, I was very interested in Zcash, mainly because it adopted a slower token distribution method, similar to Bitcoin's mining model, but it was launched seven years later. Therefore, we launched its futures contracts before any tokens were circulating for Zcash. In the fall of 2016, these contracts were very popular. By the end of 2016, the genesis block of Zcash was generated, and the price on Poloniex soared to $3,000 because the supply in the market was almost zero at that time.

However, as mining progressed, inflation gradually became apparent, supply increased, and prices subsequently fell. My biggest concern about Zcash at that time was its "Trusted Setup." This setup required users to trust the Zcash development team to complete the initialization process. Although they demonstrated the entire process transparently through a live stream, there was still some risk involved. Additionally, 20% of the mining rewards for Zcash would be allocated to the founding team, which also sparked some controversy.

Moreover, there was criticism in the market that a large portion of the circulating Zcash did not enable privacy features. This made it feel like Zcash was essentially a "downgraded version" of Bitcoin, as it was launched seven years later and lacked the strong network effects of Bitcoin.

As a result, I did not pay much attention to Zcash for a long time. Until one time, I happened to have dinner with Naval during an interview related to privacy. We talked about Zcash, and I congratulated him. He told me, "Yes, this is just my second-largest bet. I believe Zcash is the last project in the cryptocurrency space that has the potential to achieve 1,000 times returns." This statement piqued my interest.

He then addressed my concerns about Zcash one by one. He mentioned that Monero's performance in terms of privacy was not perfect, especially in an era of AI and big data. Some researchers in Japan had already been able to de-anonymize Monero. He also pointed out that Zcash had eliminated the original "Trusted Setup" in the Halo 2 upgrade, and the mining subsidies had gradually ended two years ago.

After hearing his analysis, I began to reassess Zcash. Naval is a very successful investor, and many of his judgments are quite accurate. Therefore, I decided to adopt a "invest first, investigate later" strategy. During dinner, I contacted my broker to buy some Zcash. Interestingly, none of my six brokers were willing to let me trade, which only strengthened my determination to invest.

After returning home, I began to verify all the information Naval mentioned and found that what he said was indeed true. The technological improvements of Zcash, the potential for privacy protection, and the cancellation of mining subsidies all filled me with confidence about its future.

Since then, I have fully committed to investing in Zcash. At that time, Bitcoin was priced around $110,000, while Zcash's price continued to rise. I enjoyed seeing the market's enthusiasm for Zcash, whether in praise or criticism, as it made me feel the vitality of this asset.

Ultimately, I decided to continue increasing my position in Zcash. I believe it has the potential to reach 20% of Bitcoin's value. Currently, my investment plan is nearing completion, but if the price experiences a pullback, I may buy some more. Recently, Zcash's price rebounded from a low of $400 to around $500, and I believe that as more people understand its privacy features and operational methods, Zcash's price will rise again.

At the same time, I am also trying to use some new wallet technologies to ensure that I can operate proficiently. I am prepared to continue moving forward in this market.

The Era of Privacy and Zero-Knowledge Proof (ZK) Technology is Coming

Host: Recently, I noticed Murt promoting Zcash. He mentioned that in the next five to ten years, the focus of cryptocurrencies will be to add privacy layers to existing infrastructures and systems, essentially enabling all cryptocurrencies to have privacy protection features. What do you think? Do you believe we are about to enter a new era of privacy technology?

Arthur:

Absolutely, because current AI technology is already very advanced, whether you call it AGI or something else, it is essentially a powerful predictive engine. Governments around the world will use these technologies to gain comprehensive control over our digital lives. Whether this control is good or bad, we are becoming more vulnerable in the process. We actively use smartphones and social media, which is essentially our voluntary act of providing data to governments. We upload photos, share locations, and send chat logs simply because we want to connect with the world through the internet and experience the convenience brought by technology, at the cost of sacrificing our privacy.

Many people worry that China will access our data, but I want to ask: do you use Google? If you do, then your data has already been handed over to the U.S. government. So the issue is not about China, but about who is more trustworthy. Regardless, privacy is no longer existent. Without zero-knowledge proof (ZK) technology to protect our privacy, our personal data will be easily tracked and de-anonymized by these systems. The significance of zero-knowledge proof is that it can verify your identity (for example, confirming you are Arthur Hayes) without exposing more personal information.

Now, there is a lot of discussion about "ZKYC" (zero-knowledge proof-based identity verification). I believe this technology will be very important because it can prove a user's identity while protecting their privacy. This is particularly crucial for those who want to run AI technologies but do not want their data exposed on the global network.

So I fully believe in the future of privacy technology. As people become aware that governments may use AI technology to monitor and control our behavior, the demand for privacy will significantly increase. Perhaps Zcash is a solution. I do see that discussions around privacy protection are becoming a movement, with more and more people starting to pay attention to this issue.

Finding a Balance Between Long-Term Vision and Short-Term Trading

Host: You once mentioned a project called "Hype," which achieved a 126-fold return, and you chose to sell when the price rose by 10%. How do you find a balance between your long-term investment beliefs and short-term market fluctuations? For example, how do you respond to unlocking events in the market or the actions of other investors?

Arthur:

The best investors can accept two seemingly contradictory viewpoints simultaneously. I believe in the long-term potential of an asset, but my short-term goal is to maximize my Bitcoin holdings. For me, all investment operations are aimed at generating returns, and these returns will ultimately be converted into more Bitcoin holdings. That is my core objective.

For example, if I can buy Hype at a certain price and then sell it when the price triples, using the profits to accumulate more Bitcoin, that would be an ideal operation. I would wait for a price pullback before re-entering. Through such operations, I successfully increased my Bitcoin holdings. As a professional trader and investor, I love this process.

Of course, if you are more inclined to be a long-term holder and are not interested in short-term fluctuations, that is perfectly fine. If you believe a project can achieve a 126-fold return, you can choose to buy and hold, even if it takes 12 months or longer.

But for me, I adjust my strategy based on market dynamics. If I believe the market may enter a weak phase or that a new product needs to be launched to support a higher valuation, I would choose to sell and wait for a better entry opportunity. If the project can prove its value and outperform competitors, I would consider buying back in.

For example, new products like perpetual contracts for Nvidia stocks are very attractive to me. I would evaluate with the team whether these projects are worth long-term investment. While I still believe the Hype project could achieve a 126-fold return, I am willing to wait for market developments and validation. I have plenty of time to observe and adjust my strategy.

Host: You clearly have a very positive outlook on the Hype project, and I know you are also very focused on the development of perpetual contracts. As the inventor of perpetual contracts, do you find it strange that you are no longer directly involved in the development of these protocols? Watching these projects grow and thrive in the market?

Arthur:

Not at all. I am now more focused on enjoying life, like skiing and traveling, rather than managing a team or dealing with daily affairs. I think this state is great. People like CZ can take over these matters. I have completed my mission, and I am very satisfied.

Host: So you feel like, "I have completed my task, and now I can step back"?

Arthur:

Yes, exactly. There are many young people now, full of energy, ready to make their mark in this field. I want to see projects like Hyperliquid completely disrupt CME and render it worthless. If that really happens, I would be very happy, without needing to profit directly from it.

I support these projects because I believe in their potential. I have been in this industry for many years, and I want to see Hyperliquid or other companies, like Binance or BitMEX, change the flow of the market in such a way that people have to choose: either accept perpetual contracts or exit the market.

If all CME products turn into perpetual contracts, it would prove that the innovations we made at BitMEX were correct. Perpetual contracts have become one of the most successful products among global exchanges. This also demonstrates the capabilities of Jeff Yang's team—they have only 11 people but developed such an amazing protocol. A few days ago, I met a team member of theirs at a gathering, and she told me that their team still only has 11 people. That’s really cool, and I am proud of them.

Host: That’s incredible, 11 people! How large was the BitMEX team at that time?

Arthur:

We had 250 people. In fact, I discussed Hyperliquid with the Paradigm team, and we all agreed that keeping the team small has its advantages. Once the team size expands, various issues arise, such as personnel conflicts or the need to lay off certain people. These are not things I want to deal with. As CEO, I spent most of my time in the past solving personnel issues rather than focusing on how to make money, which is not the way I want to work.

Host: I noticed you recently bought some Uniswap (UNI) tokens, although not in large quantities, but after they launched their fee mechanism. What do you think of this project?

Arthur:

I believe that in the short term, the cryptocurrency market may exhibit strong bullish sentiment towards Uniswap. More importantly, this mechanism paves the way for regulatory clarity in the U.S., allowing people to develop more functional tokens within a legal framework. This also creates opportunities for better token projects in the future.

We are moving towards a future filled with growth and innovation. Tokens like Uniswap can earn millions of dollars every day and reinvest those earnings back into the market. These tokens are not just governance tokens; they can also achieve long-term value growth. In the future, we will see more similar "pseudo-stock tokens." These tokens can not only allow companies to profit but also align with the interests of token holders.

Host: Do you think this "pseudo-stock token" model will become mainstream in the future?

Arthur:

I believe it will. Every cryptocurrency cycle gradually moves in this direction. In the past, we always heard founding teams promise to distribute profits to token holders, but in reality, they often failed to deliver on those promises.

For example, Uniswap's price once reached $35 to $40 but later fell to $3 to $4. Another example is dYdX, the original Hyperliquid project, which had a market cap as high as $28 billion to $30 billion but is now nearly worthless. They did make a lot of money, but token holders received no returns.

In fact, many token projects' founding teams have not fulfilled their promises, regardless of the reasons. For instance, Uniswap's token price peaked at $35 to $40 but later dropped to $3 to $4. Look at dYdX, the original Hyperliquid project, which proposed innovative concepts like permissionless listings and saw its market cap soar to $28 billion to $30 billion, but now it is almost worthless. These projects did earn a lot of money, but token holders did not benefit from it.

Many new tokens launched in 2023 and 2024 mostly face issues of high market cap and low liquidity. They lack clear product-market fit and do not have a sufficient customer base. Even if there is revenue, these earnings are not returned to token holders. If a project performs well, as a token holder, I also hope to profit from it.

Projects that truly deliver on their promises, like Hyperliquid, show us that even without venture capital support, as long as there is an excellent technical team and the wealth created is returned to token holders, great success can be achieved. We supported your project by buying your tokens, but if you only give us excuses like "regulatory issues," "governance issues," or "DAO voting" without returning profits, then the project will ultimately be eliminated by the market.

How to View This Cycle?

Host: Recently, I saw some seasoned industry insiders on Twitter saying that this cycle is the worst ever and cannot be compared to previous cycles. What do you think about this cycle?

Arthur:

Every cycle has its own theme. In each cycle, there are always some people who made money in the previous cycle who scoff at the new themes, thinking they are not serious enough or just "toys for young people." In reality, this is just because they feel frustrated for not seizing opportunities in this cycle.

I firmly believe that market price is the most important thing; in cryptocurrency, the most important aspects are price and market, allowing people to trade these things. Market fluctuations are normal, and I understand that. This is the essence of cryptocurrency. People once thought that dialogues in movies were vulgar, women in short skirts on television were vulgar, and the internet was also seen as vulgar. Therefore, every technology that defines the next era will be viewed as vulgar by those from the previous era.

If you tell me that memes are vulgar and NFTs are garbage, I would actually become interested in these "vulgar" things because they might just be the mainstream of the next cycle, which is why I am willing to invest in these projects.

Host: Cultural development is indeed always like this. The most controversial and conflicting things often end up breaking through.

Arthur:

This is the law of technological development. Every generation feels that the innovations of the next generation pose a threat to them. The new generation hopes to drive social progress through these new things. It is a natural cycle.

The older generation always says, "Today's young people…" If you invest in things that the new generation is interested in, then when they grow old, these things will become the norm in society. And that is the direction worth investing in.

Host: So, Arthur Hayes, how do you avoid being left behind by the times? How do you stay sharp and keep up with the times after achieving success, rather than becoming outdated?

Arthur:

The most important thing is to communicate with people, truly understand these new things, and actively participate in them. I like to walk around and see what people are doing, what young people are interested in. You can't just sit in the office and discuss traditional financial products like government bonds or Bitcoin ETFs with private bankers. While these can also make money, if you want to stay young, you must keep moving forward. If you stagnate, you will gradually decline and eventually be eliminated.

Whether it's exercising or communicating with people, understanding what they are doing. If you don't try to participate in certain things, you will gradually "die." This is the natural law of the universe. If you are unwilling to delve into the thoughts of the younger generation or unwilling to attend meetings and observe new trends, then you will ultimately be stuck. This state may last for a while, but eventually, you will be eliminated.

So, I strive to stay relevant. Of course, there are others who are better than me at keeping up with trends, but I really enjoy the changes in the market. If I love the market and want to understand the development of things, especially in the cryptocurrency field, then I must observe closely, at least stay attentive. Even if I don't participate, I need to keep an eye on the changes in trends.

Advice for Newcomers to Cryptocurrency

Host: There are many young people watching this live stream, many of whom are new to cryptocurrency, especially newcomers entering the market in 2024 due to the rise of Solana. They may feel confused, as there are many voices in the market, such as "You only have two years to succeed, or you will be stuck at the bottom forever." There are also suggestions, like the one from GCR, proposing to double wealth through high-risk investments. This atmosphere puts a lot of pressure on many people, and some even feel overwhelmed.

So, if you were in such an environment, what advice would you give these newcomers? How can they adjust their mindset and find the right direction?

Arthur:

First of all, I want to say that time and compounding are the two most powerful forces in the world. You may have heard this fact: assuming an inflation rate of 2%, the actual purchasing power of the dollar has decreased by 99% from 1913 to now. This shows that even small changes, over time, can have a huge impact.

Therefore, my advice is to set aside those "high-risk, get-rich-quick" ideas. You can observe your emotions and understand this urgent desire for success, but do not let it control you. Tell yourself that if I can achieve a 5% compound growth each year over a certain period, rather than suffering huge losses in pursuit of high returns, then over time, I can still accumulate considerable wealth. This is a simple mathematical principle, but it requires patience and discipline to execute.

If you really want to try high-risk trading, like leveraged trading, then you need to be well-prepared. High risk means you must become a full-time trader, always paying attention to market dynamics, deeply understanding the microstructure of the market, familiarizing yourself with the products you are trading, and knowing who is trading when and why. If you are willing to fully commit and have enough knowledge, then you can consider using leverage.

But if you cannot do that, then long-term investing is a more suitable choice for you. You can set a fixed savings ratio, and once set, do not pay too much attention to market fluctuations. If you do not have enough time and energy to learn the skills of high-risk investing, then all high-risk trading will only lead you into financial trouble.

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