Arthur Hayes Just Warned That The Fed Has No Choice But To Print — And Most People Aren't Ready

Ajouté : 2026-05-05

[00:00:00]Yeah, so scenario one is we go back to February 26th and in terms of before the US started attacked Iran and that is the mental model of what's going on in the world. Obviously, at that point, I think the biggest worry that the market has is at least for me our central banks most importantly, the Fed printing enough money to offset a potential deflationary effect of an acceleration of the growth of the AI and synthetic economy and the um firing of all these knowledge workers. Not every knowledge worker.

[00:00:35]You know, 10 20% the the most unproductive folks in an organization.

[00:00:40]So, this isn't sort of a mass calling of people, which I think is the straw man argument of why people say, "Oh, no, it's not going to be that bad. AI is not going to cause everyone to lose their job." But, that's not the point. So, that's that is that scenario and you know, we saw software ETF, US SaaS stocks getting crushed, private credit getting crushed, Nasdaq held up pretty well. Bitcoin obviously followed those two things down to the gutter, you know, down 50% from October of last year. So, that's pre-war. We go back, nothing ever happened. No no attacks on Iran.

[00:01:11]Tomorrow, the Bitcoin conference opens in Las Vegas, the most important Bitcoin event of 2026. And today, four stories broke that prove Arthur Hayes' entire wartime economy thesis is playing out exactly as he described. Bitcoin's 30-day correlation with the US dollar index just hit -0.9, the most extreme level in nearly four years, meaning 81% of Bitcoin's recent price action is mathematically explained by dollar movements alone.

[00:01:34]The DOJ just arrested a US Army Special Forces soldier for making $400,000 in Polymarket bets on a Venezuelan raid. He personally participated in the first prediction market insider trading prosecution in American history. Morgan Stanley launched a dedicated stablecoin reserves money market fund. And Michael Saylor declared the Bitcoin winter is over.

[00:01:52]Arthur Hayes has been saying CPI is irrelevant because wartime economies are financed by money printing, and today every piece of data confirms the money is already flowing. Let's watch and discover.

[00:02:02]Here is the single data point that unlocks Arthur Hayes' entire framework for where Bitcoin goes from here, and it received almost no mainstream coverage this week. Scenario two is scenario two or three are kind of where we are right now. It's a Is the strait open? Is the strait closed?

[00:02:20]Both sides say it's open, but then you hear about ships getting attacked and you hear about the US having a blockade.

[00:02:26]So, you don't really know what to make of it all.

[00:02:29]You know, everybody's lying. It's war.

[00:02:31]It's propaganda. Don't look look look at the news. They're lying to you.

[00:02:35]The only thing I think to look at is oil prices. So, how much does it cost to get a barrel of oil delivered nowish?

[00:02:44]How much does it cost to get it delivered in 6 months' time? And you're seeing that spread contract as sort of it seems like both sides are coming to some sort of tacit agreement as to what the new state of normal should be for the strait. I think as we're recording this now, Trump extended the ceasefire for I don't know how what what period it was, but it was supposed to expire on the 22nd. He extended it.

[00:03:10]They're still talking. Both sides are still bombing each other. So, again, I think it's sort of this is the new normal. There's some sort of ships transiting through the strait.

[00:03:20]Some people are getting some commodities. A lot of people are not.

[00:03:23]And so, it's a sort of a wide some grab bag of pain going around, but not enough to really materially destroy the world economy. And the scenario four is nuclear armageddon. It's uninvestable.

[00:03:35]Life really sucks.

[00:03:37]There's really really no point in talking about it because, you know, it doesn't really There's not really much you can do about it.

[00:03:43]Bitcoin's 30-day correlation with the US dollar index has deepened to -0.9.

[00:03:47]That is the most negative correlation between Bitcoin and the dollar since 2022. The practical meaning, 81% of Bitcoin's recent short-term price movements are statistically explained by movements in the dollar index. When the dollar rises, Bitcoin falls. When the dollar falls, Bitcoin rises. The relationship has never been this tight, this reliable, and this mechanically predictable in nearly four years.

[00:04:10]This has a specific consequence for what happens next. The dollar is currently rebounding modestly amid geopolitical risk from the Strait of Hormuz and inflation concerns from $103 oil. Every dollar of dollar strength is mechanically suppressing Bitcoin's price. But, Arthur Hayes' framework explains precisely why this relationship cannot persist indefinitely. A wartime economy financed by money printing, which is what Arthur Hayes describes as the inevitable outcome of Trump's military spending push against Iran, is structurally dollar negative.

[00:04:37]And so, right now, the Fed is printing money.

[00:04:40]And so, I think these inflation statistics are irrelevant because at the end of the day, if Trump is saying, and I'm sure the next person who's in office, Democrat or Republican, is saying that we have to switch to wartime footing, it's embarrassing that Russia outproduces the United States in armaments and hasn't been able essentially to um survive in Ukraine and not get beaten, and the Iranians are putting a toll booth in front of the mightiest navy that's ever existed in human civilization, because again, the US can't produce enough missile interceptors cheap enough to counter these drones.

[00:05:19]That has to That has to stop. That's got to be fixed. How do you fix it? You print the money and you build more [ __ ] All right, so I think all this talk about the Fed and inflation doesn't really matter because if the political impetus is for a wartime economy, it must be financed by the Fed, and it always has been financed by the Fed. And so, if the predecessor Powell was doing a policy, it's going to be very difficult for whoever comes in to change that. And so, I think we're starting from an expansionary stance right now.

[00:05:48]It's only going to get worse. I don't care what CPI is. Don't care what core is. Don't care any of these These numbers are Don't They mean nothing.

[00:05:55]Trump doesn't give a [ __ ] what CPI is.

[00:05:57]He gives a [ __ ] how many missiles did I send? How much did it cost?

[00:06:00]How many drones can I kill? Right? CPI, who gives a [ __ ] about CPI? Those It doesn't even What do those letters even mean?

[00:06:10]Cash, I'd say probably maybe like 5% cash. Everything I'm pretty long.

[00:06:17]It's The decision tree for us right now is obviously, we have a lot of Bitcoin.

[00:06:22]Do we sell down the Bitcoin to buy things that'll go up faster if we're in a more supportive liquidity environment, right? Should I own more Zcash? Should I own more hype other other tokens that we should be buying that are riskier that we think can outperform the price of Bitcoin. That's the decision tree that I'm looking at right now. Because again, we're a long-only crypto investor, you know, and we're pretty much almost at max risk. But, we could be we can go crazier.

[00:06:54]Every new missile the US manufactures, every interceptor it deploys, every military contract it funds is financed through Treasury issuance that eventually requires the Fed to absorb.

[00:07:04]The Fed absorbing Treasuries creates new base money. New base money is inflationary. Inflation is dollar negative. A dollar negative trend is structurally Bitcoin positive through the -0.9 correlation that now exists.

[00:07:16]The disagreement between Arthur Hayes and Anthony Scaramucci is worth noting directly. Scaramucci told CoinDesk this week that a meaningful Bitcoin recovery may not arrive until October or November, and that the current pattern aligns with Bitcoin's four-year having cycle. Arthur Hayes explicitly dismisses the having cycle framework. He says the old mental model from pre-war February 26th no longer applies. The central bank printing requirements of a wartime economy override cycle-based analysis entirely, and the only indicator that actually matters is whether commercial banks are starting to expand lending.

[00:07:45]The two frameworks produce dramatically different near-term Bitcoin price conclusions. Tomorrow's Bitcoin conference will tell you which narrative the market is currently pricing.

[00:07:54]This is the story that is going to shape the regulatory future of one of the most important new crypto-adjacent markets in the world, and Arthur Hayes' wartime scenario is directly embedded in it. The Department of Justice announced the arrest of Master Sergeant Gannon Ken Vandike, a US Army Special Forces soldier who participated directly in the January operation that captured Venezuelan President Nicolas Maduro.

[00:08:13]Hours before President Trump announced the capture publicly, Vandike allegedly placed approximately $33,000 in Polymarket bets on the outcome of the Venezuela raid. He exited those positions after the announcement for a profit of over $400. 000. This is the first insider trading prosecution in the United States tied to a prediction market. Yeah, I I I guess that's what I'm trying to understand. And so, um are you sitting in spot pretty much right now? And you're not trading, right? So, you must be just spot everything. And then, when you do get that confirmation that it's time to get to put more risk on table, does that mean leverage? Does that mean rotating to, you know, other uh you know, all like other alts, things like that?

[00:08:53]Or or what does that mean for you that uh you know, more risk on and Yeah. More risk on means more higher shitcoin exposure, right? So, sell Bitcoin, buy other things. Maybe buy more hype. Buy more Zcash. What are What are What else? I mean, those are very I mean, I have In my view, those are very high-quality shitcoins. Then you move down the quality curve to like the dog [ __ ] because it goes up 10 20x just because people are feeling better about better about the situation in the world.

[00:09:19]And you know, I'm getting a lot more comfortable with the situation. And what I'm really looking at is bank lending because I don't as much as I think that all this money printing needs to happen, I still don't think that there is the institutional acknowledgement of sort of if any deflationary risks and all these sorts of things at the Fed that they're going to materially change what they're doing now. I don't think that they're going to announce a $100 billion a month quantitative easing program anytime soon. All right, so they have this They have this reverse reserve management purchases $40 billionish a a They've justified that based on you know, the repo crisis of last fall and I think they're going to leave those settings alone and there's going to be a lot of politics involved. Wars coming in. Is Powell going to leave or stay?

[00:10:07]How many members are going to side with who? You know, all that sort of stuff, right? Which is going to limit their ability to do anything crazy unless there's some massive financial calamity.

[00:10:17]But the banks as of April 1st had even more headroom to increase the size of their balance sheet with the enhanced supplemental ratio changes. And so I really want to see are the commercial banks stepping up to the plate and starting to lend more to the wartime US economy, at least on the US commercial banking side. So I'm really going to be looking at Fed publishes a weekly series called other deposits and liabilities, which is sort of a proxy for bank lending, a forward looking indicator for bank lending. And I want to see how that's starting to trend. Are we starting to see a a good trend upwards.

[00:10:58]We've seen some from November of last year, but it needs to go further if we're really going to get that expansion of credit because I believe that the majority of the new money created is going to come from the commercial banking system like it does in most other major economies, especially in China. The central bank doesn't print money in China. The commercial banking system prints the money and the central bank tells them where to lend.

[00:11:19]The government. So I think the US is going to move to a Chinese model.

[00:11:23]Trump's going to tell you where you need to be lending, whether it's this type of armament manufacturer, this type of rare earth minerals thing.

[00:11:32]Maybe there's a public private partnership with the Department of Department of War putting in equity in a project and then the JP Morgan with the the balance of the loans to get something done. But there's all these different ways of doing things, but at the end of the day it's going to move to how Japan and China allocate credit, which is window guidance. Government tells the banks, these are the things we would like you to lend to and the banks then go and do it.

[00:11:55]And so that's how I think things are going to run, but I want to see more confirmation of that and we'll see that in you know, bank lending statistics and reports from the large banks in the US.