Arthur Hayes, Chief Investment Officer at Maelstrom, has unveiled an audacious forecast for Bitcoin, projecting the digital asset could reach an astonishing $3.4 million by 2028. This bold prediction is underpinned by a detailed analysis of potential US monetary policies, specifically anticipating aggressive expansion driven by a possible Trump administration.
The Rationale: US Fiscal Pressures and Fed Intervention
Hayes's outlook is deeply rooted in an analysis of impending US fiscal challenges. He anticipates sustained annual deficits of roughly $2 trillion through 2028, compounded by the significant task of refinancing maturing debt. This combination of factors could necessitate new Treasury issuance exceeding $15 trillion over the next three years. Crucially, Hayes expects the Federal Reserve to step in as the primary buyer of this massive new debt. Drawing parallels to the COVID-19 crisis, where US authorities absorbed about 40% of government borrowing, he predicts the Fed will purchase 50% or more of the upcoming debt. This aggressive intervention is anticipated as foreign central banks are seen becoming increasingly reluctant to finance US obligations, especially under a scenario of projected massive debt issuance.
From Credit Creation to Bitcoin's Valuation
This expected surge in credit creation, stemming from the Fed and the broader banking sector, forms the direct link to Bitcoin’s potential valuation. Hayes estimates a significant correlation, suggesting Bitcoin's price could appreciate by approximately $0.19 for every dollar of credit growth. Under this model, each trillion dollars printed could propel the premier cryptocurrency substantially closer to the multi-million dollar range. While the $3.4 million figure is striking, Hayes emphasizes that the direction of travel is paramount over precise numbers. His conviction lies in identifying Bitcoin as the "fastest horse" to bet on, assuming a scenario where trillions of dollars are injected into the financial system to achieve policy goals, making the asset a direct beneficiary of such expansive monetary policies.
