In this industry, where hype often outweighs analysis, he has always been one of the most insightful voices.
Written by: Thejaswini M A
Translated by: Saoirse, Foresight News
Arthur Hayes travels with a suitcase full of plush toys.
The 40-year-old cryptocurrency billionaire has collected over 100 plush toys, each with a unique name, which he brings along to celebrate important moments in life. In his Miami apartment—where he spent six months under house arrest—visitors can see a row of toys arranged like in a children's bedroom: a yellow-green starfish, a fox, an armadillo, a giraffe, an elephant, an octopus, a snake, and a personified little bok choy.
For someone who has created the financial tools that dominate cryptocurrency trading today, this might seem a bit quirky. But Hayes has never played by the rules.
In 2013, Bitcoin traders faced a problem that was both absurd and mathematically compelling.
Every month, their futures contracts would expire, forcing them to roll over positions repeatedly, much like playing an expensive financial version of "Sisyphus Simulator."
Rolling over contracts, paying fees, over and over again, ultimately all funds trickled away through trading costs into the pockets of exchanges.
Arthur Hayes, a derivatives trader with years of experience at Deutsche Bank and Citigroup, spent his life studying how to profit from the characteristic of "markets barely held together by mathematical tape." As he examined the dilemma before him, an idea that would later prove invaluable took shape in his mind:
"What if we could design a futures contract that never expires?"
This was not some philosophical speculation—Hayes was not entangled in existential questions about the nature of time.
He was pondering: what if it were possible to create a futures contract that would completely end the monthly cycle of fees that was gradually driving global Bitcoin traders to bankruptcy?
The answer made him a cryptocurrency giant, creating the financial tool that now supports most cryptocurrency trading, only to later face federal criminal charges for creating it without prior approval from the relevant authorities.
This is a story about traditional financial logic breaking into the "wild market"—a market built by a group of programmers who view regulation as "suggestions." What sparks fly when rigorous financial logic collides with the casual world of code?
Hayes grew up in Detroit in the 1980s, where both of his parents worked for General Motors. They understood that education was the only reliable way to escape the cyclical ups and downs of the auto industry. To enable him to attend Nichols School, they moved to Buffalo. It was a preparatory school where rich kids learned Latin while poor kids learned to network with the wealthy.
He graduated second in his class and joined the school’s network team. After attending the University of Hong Kong and Wharton, he earned a degree in economics and finance in 2008, a perfect time to witness the collapse of the global financial system in real-time.
Hayes did not stay in New York to participate in the profound reflection on whether Wall Street was terminally ill after the financial crisis; instead, he moved to Hong Kong. This move proved to be prescient—there, one could trade complex derivatives with few questioning the systemic risks involved.
Learning the "language" of derivatives
As a broke intern, Hayes turned food delivery into a business, charging a markup on every colleague's order and earning a few hundred dollars a week. During the Wharton recruiting season, he took recruiters to nightclubs in Philadelphia, leaving a lasting impression. His work attire became legendary: on one "Casual Friday," he wore a tight pink polo shirt, acid-wash jeans, and bright yellow sneakers, prompting a department head to exclaim, "Who the hell is that guy?" This incident led the company to cancel "Casual Fridays."
In 2008, Deutsche Bank's Hong Kong branch hired Hayes as an equity derivatives trader. It was here that he dove into the complex mathematical world of derivatives—these financial instruments derive their value from the underlying assets.
He specialized in Delta-one trading and ETFs, which are akin to "pipeline engineering" in finance—unflashy but essential. Once you grasp the logic of how the pipes connect, you can profit from it.
(Note: Delta-one trading is a financial trading method that tracks the price movements of underlying assets through products that change in value in a 1:1 relationship with the asset price, such as ETFs and futures.)
After three years of honing his skills to arbitrage price differences that last only about 17 seconds, he jumped to Citigroup in 2011. But by 2013, with tighter banking regulations, the good times came to an abrupt halt. Hayes was fired, but this led him to encounter the Bitcoin market just as it needed knowledgeable "financial pipeline workers."
In 2013, Bitcoin exchanges were built by people who understood blockchain protocol coding—these individuals could code but had never heard of "margin requirements." In Hayes's view, this market operated 24/7 without a circuit breaker, no central oversight, and no complex risk management. It was either the future of finance or a clever design that would quickly drain people's money—and he believed both possibilities could coexist.
Despite its rudimentary infrastructure, the underlying mechanisms fascinated him. This was clearly a market that urgently needed the financial engineering knowledge he had learned from traditional finance.
Building BitMEX
He teamed up with Ben Delo and Samuel Reed—the former a mathematician capable of building trading engines, the latter having a deep understanding of how cryptocurrencies operate. In January 2014, the three began developing BitMEX (Bitcoin Mercantile Exchange), claiming to create "the premier peer-to-peer trading platform" to compete with those mostly poorly functioning, barely usable exchanges.
The skills of the three founders complemented each other perfectly: Hayes understood market structure and derivatives, Delo could build complex trading engines, and Reed was well-versed in cryptocurrency technology.
BitMEX launched real-time trading on November 24, 2014, focusing on Bitcoin derivatives. This launch was the result of months of careful development and stress testing. At launch, the founding team was actually dispersed around the globe—Hayes and Delo in Hong Kong, while Reed participated remotely from Croatia on his honeymoon.
Early products included leveraged Bitcoin contracts and Quanto futures, allowing traders to express their views on Bitcoin prices without actually holding the underlying asset. These complex tools required a deep understanding of margin, clearing mechanisms, and cross-currency hedging—which was precisely Hayes's team's strength.
(Note: Quanto futures are derivative contracts where the underlying asset is priced in one currency but settled in another currency at a pre-agreed exchange rate, thus eliminating the risk of exchange rate fluctuations at settlement.)
But their ambitions went far beyond that.
On May 13, 2016, BitMEX launched an unprecedented innovation: the XBTUSD perpetual contract. This was a futures-like tool that never expired, anchoring the contract price to the spot price of Bitcoin through a funding payment mechanism between long and short positions. The contract offered up to 100x leverage and settled in Bitcoin.
Traditional futures expire monthly, forcing traders into an absurd cycle of "rollover - pay." Hayes borrowed the funding mechanism from the forex market, injecting new logic into Bitcoin futures: contracts would not expire but would self-correct through mutual payments between longs and shorts: when the contract price is above the spot price, longs pay shorts; when below, shorts pay longs.
This design eliminated expiration dates, reduced trading costs, and was practical enough that all cryptocurrency exchanges immediately sought to replicate it. Today, perpetual contracts account for a significant portion of global cryptocurrency trading volume. Hayes effectively "solved" the time problem, at least in the realm of derivative contracts.
Explosive growth and regulatory scrutiny
The XBTUSD contract on BitMEX quickly became the deepest liquidity Bitcoin derivatives market globally. Its mature risk management, professional-grade tools, and high leverage attracted both traditional financial traders and native cryptocurrency players.
By 2018, BitMEX's daily notional trading volume had surpassed $1 billion. The exchange moved into the 45th floor of the Cheung Kong Center in Hong Kong—one of the city's most expensive office buildings. In August of the same year, when BitMEX's servers went down for scheduled maintenance, Bitcoin's price surged by 4%, adding $10 billion in market value to the entire cryptocurrency market.
BitMEX nominally prohibited U.S. customers from participating, but critics claimed these restrictions were largely ineffective. Its influence on Bitcoin pricing caught the attention of scholars, regulators, and politicians newly engaging with the cryptocurrency market.
In July 2019, economist Nouriel Roubini published a report accusing BitMEX of "systemic illegality," allowing excessive risk-taking and potentially profiting from customer liquidations. These accusations triggered regulatory investigations and congressional hearings on the structure of the cryptocurrency market.
By the end of 2019, daily trading volume in Bitcoin derivatives had reached $5-10 billion, more than ten times the spot trading volume. BitMEX held a significant share of this market, making Hayes and his partners central figures in the global cryptocurrency landscape.
On October 1, 2020, the other shoe dropped: the CFTC filed a civil complaint, and the DOJ announced criminal charges, stating that BitMEX operated as an unregistered futures broker while serving U.S. customers and ignored anti-money laundering requirements. Prosecutors pointed out that Hayes and his partners deliberately evaded compliance while earning hundreds of millions in profits.
Hayes resigned as CEO that day. Reed was arrested in Massachusetts, while Hayes and Delo were listed as "fugitives"—a term used by the DOJ meaning "we know where you are, we just haven't moved to arrest you yet."
This legal battle lasted over two years, during which Hayes unexpectedly discovered a talent for writing market and monetary policy analyses. His "Crypto Trader Digest" column became essential reading for anyone trying to understand the connections between macroeconomics, Federal Reserve policies, and cryptocurrency prices. The analytical framework he built explained why central bank decisions would ultimately drive people toward Bitcoin.
In August 2021, BitMEX agreed to pay $100 million to settle civil charges. On February 24, 2022, Hayes pleaded guilty to the charge of "willfully failing to establish an anti-money laundering program." On May 20 of the same year, he was sentenced to six months of house arrest, two years of probation, and a $10 million fine.
During the litigation, Hayes gradually became one of the most insightful commentators in the cryptocurrency space. His analysis of Federal Reserve policies and Bitcoin price dynamics reshaped traders' and institutions' perceptions of cryptocurrency as a macro asset. The concept of "NakaDollar" he proposed was highly forward-looking: creating synthetic dollars through a combination of Bitcoin longs and perpetual contract shorts, allowing exposure to dollars without traditional banks.
Hayes also candidly emphasized the value of Bitcoin as a hedge against currency devaluation: "In the realm of money transfers, we are moving from a simulated society to a digital society, which will bring about tremendous disruption. I see opportunities to create companies using Bitcoin and cryptocurrencies that can benefit from this chaotic transformation."
On March 27, 2025, U.S. President Trump pardoned Hayes and the co-founders of BitMEX, bringing this legal chapter to a close. By this time, Hayes had already embarked on a new venture outside of BitMEX, serving as the Chief Investment Officer of the family office fund Maelstrom, with investments spanning venture capital, liquidity trading strategies, and cryptocurrency infrastructure.
The fund supports Bitcoin development by providing grants ranging from $50,000 to $150,000 to developers, as stated on the Maelstrom website: "Bitcoin is the cornerstone asset of the cryptocurrency space; unlike other projects, it has never financed technology development through token issuance." This reflects Hayes's emphasis on sustainable funding support for open-source development.
Recent Market Trends
Hayes's current investment strategy reflects his macro vision. In August 2025, he made headlines for purchasing over $15 million in cryptocurrency within five days, focusing on Ethereum and DeFi tokens rather than Bitcoin. This included 1,750 Ethereum (worth $7.43 million) and a significant amount of HYPE, ENA, and LDO tokens. This allocation stemmed from his judgment that certain altcoins would benefit from the current market environment, namely institutional favor towards Ethereum, rising stablecoin adoption, and various protocols generating revenue by filling market gaps.
Hayes is also one of the most outspoken supporters of Ethena (ENA). This synthetic dollar protocol is based on the derivatives concept he pioneered at BitMEX. In August 2025, he purchased 3.1 million ENA tokens (worth $2.48 million), becoming one of the largest individual holders of the project. In his view, Ethena is an evolution of the "NakaDollar" concept: creating dollar-pegged assets using derivatives without relying on the traditional banking system. This investment is his bet on a new generation of projects that are redefining the operation of synthetic assets using perpetual swaps and funding mechanisms.
Earlier that month, due to concerns about the macro economy, he sold $8.32 million worth of Ethereum at nearly $3,500. However, when Ethereum rebounded above $4,150, he bought back all his positions and candidly stated on social media: "I had to buy it all back. I swear, I will never take profits again."
The core of Hayes's current macro argument is his belief that the Federal Reserve will inevitably begin printing money. He points out that structural issues such as pressure in the real estate market, demographic changes, and capital outflows will force policymakers to inject about $9 trillion into the financial system. "If we don't print money, the system will collapse." He particularly emphasizes the debt burdens of institutions like Fannie Mae and Freddie Mac.
If this scenario comes true, Hayes predicts that Bitcoin could reach $250,000 by the end of the year, as investors seek alternatives to fiat currency devaluation. Based on the unsustainability of the current monetary system and Bitcoin being the most viable store of value alternative, he believes Bitcoin could reach $1 million by 2028.
Perpetual contracts have fundamentally changed cryptocurrency trading, eliminating many frictions present in the early derivatives market. By 2025, even mainstream platforms like Robinhood and Coinbase were launching their own perpetual products, while new exchanges like Hyperliquid built complete businesses around Hayes's original innovations.
The regulatory framework spawned by the BitMEX case has also shaped industry standards: comprehensive anti-money laundering programs, customer verification, and regulatory registration have become essential requirements for any exchange serving the global market.
At 40, Hayes occupies a unique position in the cryptocurrency ecosystem. He has experienced traditional finance before the birth of Bitcoin, possesses the ability to build the infrastructure that defines cryptocurrency trading, and has endured both explosive success and serious legal consequences.
His story proves that sustainable success in the cryptocurrency space requires an understanding of the balance between technology and regulation, innovation and compliance. The success of perpetual contracts is not only due to their technical ingenuity but also because they solve real problems for traders. At least, this was the case before the regulatory framework caught up with the pace of innovation.
"When we built all this back then, we didn't need anyone's permission. Which industry can still allow three ordinary people to create an exchange with daily trading volumes in the billions?" Hayes reflects on the experience of building BitMEX with a sense of wonder.
This statement captures the opportunities and responsibilities of building financial infrastructure in a rapidly evolving regulatory environment.
Today, Hayes continues to analyze the market and make significant bets based on macro judgments. His influence has long surpassed individual trades or investments. Through articles, investments, and ongoing participation in the cryptocurrency market, he remains one of the most insightful voices in this industry, where hype often outweighs analysis.
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