Arthur Hayes, the former head of the BitMEX exchange, has released a new essay titled “The Size of the Beat,” in which he analyzes the impact of financial and political processes on the cryptocurrency market. In his piece, he compares market dynamics to the rhythm of dance, emphasizing the importance of “catching the right beat” for successful investing.
This is reported by Business • Media
“If you don’t catch the right beat, the portfolio will ‘stumble’.”
The main idea of the author is the thesis that the speed of fiat currency issuance determines the rhythm for Bitcoin and other digital assets. According to Hayes, by the end of 2025, the price of Bitcoin could reach $250,000, while Ethereum could hit $10,000.
The impact of economic policy and war on the markets
Arthur Hayes notes that today’s global events, such as wars and trade tariffs, can create dissonance in the markets but do not stop the gradual growth of cryptocurrencies. In his view, the administration of President Donald Trump will continue to develop an “industrial policy,” involving the banking system in financing “critically important” sectors, including the defense industry.
As an example, Hayes cites the collaboration between the U.S. and MP Materials: the Department of Defense will become the largest shareholder of the company, and the agreement reached includes a significant increase in the extraction of rare earth metals in the U.S. This is expected to weaken China’s position in the global market and encourage banks like JPMorgan and Goldman Sachs to issue multibillion-dollar loans backed by government guarantees.
According to the author’s logic, this mechanism creates a money multiplier effect: funds flowing into the military-industrial complex increase the money supply, which in turn fuels economic growth, although it simultaneously stimulates inflation.
Credit expansion and the cryptocurrency bubble
Hayes is convinced that policymakers aim to direct excess money into “safe” bubbles—such as cryptocurrencies. This capital allocation helps avoid societal destabilization similar to what could arise from sharp increases in food or real estate prices.
He draws parallels with China’s economic model, where bank loans and government stimulus contributed to the rapid growth of the real estate market. By analogy, the U.S. administration could stimulate the growth of the cryptocurrency market, allowing citizens to participate in the financial upturn and fill the budget through taxes and fees.
The mechanism is examined in detail, whereby the growth of the cryptocurrency market capitalization leads to an increase in deposits in stablecoins, which are invested in U.S. Treasury bills (T-bills). According to Hayes’s calculations, if the market capitalization of cryptocurrencies reaches $100 trillion by 2028, only stablecoin issuers will be able to invest up to $9 trillion in T-bills, which will provide significant support for financing the U.S. budget deficit.
Trading strategies and forecasts
In the concluding part of the essay, Hayes emphasizes that the current credit impulse is particularly beneficial for cryptocurrencies. He notes the growing interest of Western institutional investors in Ethereum and decentralized finance (DeFi), which could act as a catalyst for a new surge in the market. The author expects that by the end of 2025, Bitcoin will reach $250,000, and Ethereum will hit $10,000.
Hayes also stresses the importance of keeping pace with the market and maintaining flexibility in investment strategy, as political and economic processes remain the main drivers for the development of the cryptocurrency sector.