Recently, the sharp decline in the price of Bitcoin has raised concerns among investors and market analysts.
Despite this recent downturn, Arthur Hayes, co-founder and former CEO of BitMEX, proposed a perspective that may reassure Bitcoin enthusiasts. Hayes discussed historical economic cycles and their impact on Bitcoin as a safe asset.
He classified historical economic cycles into local cycles of inflation and broader global ones. The BitMEX co-founder characterized the current economic environment as a local cycle marked by significant geopolitical changes and shifts in monetary policy.
Within this cycle, Hayes pointed out the transition from a US-dominated unipolar world to a multipolar one with growing powers such as China, Brazil, and Russia. He emphasized that governments are increasingly resorting to financial repression and extensive money printing to finance deficits, which negatively affects asset valuation and wealth preservation.
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During such periods, Hayes argues that Bitcoin performs better than traditional assets. Unlike gold, which relies on nature to maintain its accounting ledger and has slow physical transfer, Bitcoin’s accounting ledger is maintained through blockchain, enabling fast transactions. According to him, this makes Bitcoin a more attractive safe asset than gold in a local cycle.
Finally, he added:
“Bitcoin is better, while gold is worse. That’s why Bitcoin has stolen part of gold’s thunder from 2009 until now.”
