.CryptoHayes talks The Doom Loop leading to Yield Curve Control by the Fed and eventually $1M bitcoin. godbole17 reports in this morning's First Mover Americas.
How high can bitcoin fly in the long run? Probably $1 million, according to Arthur Hayes, co-founder and former CEO of crypto spot and derivatives exchange BitMEX., Hayes argued that the West's decision to freeze Russia's forex reserves and push the country out of the global payments messaging system SWIFT has set the stage for a so-called doom loop where the current account surplus nations stop investing in dollar-denominated assets like Treasuries and move into bitcoin and gold. The U.
Countries running current account surplus are net lenders, meaning they park their money into bonds of other nations, helping finance their fiscal deficits. For instance, China, a current account surplus country, is one of the biggest buyers of U.S. treasuries. The constant demand for Treasuries from China keeps yields or borrowing costs from rising sharply .
The latter, popularly known as quantitive easing, boosts liquidity and is inflationary, as have observed since 2008 and would strengthen the case for investing in bitcoin and gold. According to Hayes, the Fed would be forced to launch yield curve control , a sort of perpetual QE, which involves targeting a longer-term bond yield by a central bank, then buying or selling as many bonds as necessary to hit that objective.
Hayes pointed a supposedly-impending break up of the European Union as another bullish catalyst for bitcoin.
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