Arthur Hayes, chief investment officer at cryptocurrency venture capital firm Maelstrom, says he doubts Donald Trump’s administration will succeed in creating a strategic reserve of Bitcoin, a policy on which many cryptocurrency enthusiasts are pinning their hopes.
“I don’t think Trump will ever make a bitcoin reserve,” Hayes, co-founder and former CEO of BitMex, said in an interview. “At the end of the day, I don’t know how borrowing money to buy bitcoin on any of Trump’s platforms helps.”
Trump certainly sees the benefit that cryptocurrencies can bring him, having launched a couple of lucrative meme coins (crypto tokens with no use other than being volatile speculative instruments) before his inauguration. For die-hard Bitcoin supporters, a US strategic reserve held in BTC would be something of an apotheosis for the most valuable token.
Hayes said: “I hope I’m wrong” regarding the implementation of a BTC reserve. But he highlighted the limited time frame before the midterm elections, which could restrict the ability to implement substantial policy changes, as well as the fact that there are many other things to allocate time and money to.
“You have a lot of debt capacity before destroying the bond market. Are you going to borrow money to buy bitcoins? Are you going to borrow money to provide health care to the seniors who voted for you, or to build more bombs to please the defense lobby? Hayes said.
“There are many different things you can borrow money on to spend. I just don’t think I’m going to spend it on bitcoins. “While the bitcoin brothers believe they are so important, there are many other stakeholders who want the borrowed money to go into their pockets,” he added.
Hayes could be considered a contrarian. Mischievous irreverence when investing through his new Maelstrom fund: “We love undervalued shit” [shitcoins] – is underpinned by insightful insights into macroeconomics, with particular pessimism about the ways in which governments erode the wealth of ordinary people.
Maelstrom primarily writes checks in the $50,000 to $100,000 range in early-stage crypto projects and acquires tokens rather than shares; Recent successes included investing in stablecoin project Ethena Labs.
Speaking about Maelstrom’s investment thesis, Hayes said: “Let’s not kid ourselves, it’s pure speculation. Most of these things will be zeros. And so I don’t want to disguise it with some kind of pretentious language. “We are speculating.”
