Bitcoin is Antidote for ‘Flawed, Corrupt, Parasitic’ Fiat Banking System

Fed chairperson Jerome Powell has been at the receiving end of significant backlash for his stance on implementing the same approach that helped the US get rid of inflation several decades ago. This strategy has been strongly contended by BitMEX founder Arthur Hayes while pointing out the difference in economic and monetary conditions in the US today from what they were in 1980.

Hayes said the Fed is doomed to fail if it continues to run the same playbook, particularly given that the current debt profile is four times larger than it was over 40 years ago.

The mishaps in the fiat sector, however, can benefit crypto such as Bitcoin. In fact, Hayes is of the opinion that Bitcoin’s value proposition lies in the asset’s ability to counteract a fiat system that he describes as “flawed, corrupt, and parasitic” in nature.

Bitcoin: Antidote for ‘Parasitic’ Fiat Banking System?

In the latest blog post titled ‘Kite or Board,’ Hayes pointed out that the Federal Reserve plans to tighten monetary policy by raising interest rates and reducing its balance sheet essentially means that more stimulus will be handed to rich asset holders. He added that the Feds want to control both the quantity and price of money. The exec, however, believes the quantity of money is more important than its price.

The former BitMEX CEO further said the US fixed-income markets are no longer free, blaming the entity overseeing the space for having the power to print money at will and unilaterally change the banking and financial rules. He went on to add that,

“Don’t fight the Fed unless you want to get rugged.”

According to the exec, as long as the Fed is committed to its current path, tech stocks and crypto will continue to rise. He also believes that a dysfunctional US Treasury market is beneficial for risk assets of finite supply, like Bitcoin.

“Fed and US Treasury combined are handing out billions per month to wealthy savers. This money has to go somewhere, and some of it will flow into tech stocks and crypto. As apocalyptic as the mainstream financial media might sound vis-a-vis a sharp correction in crypto prices, there is a lot of cash that needs a home in finite-supply financial assets like crypto. “

Bitcoin Prediction

With Bitcoin’s recent sell-off and increased bearish pressure, many industry observers are betting on a break below $20,000. Hayes, on the other hand, has a different projection and instead believes the flagship cryptocurrency would continue to trade around $25,000 in the third quarter of the year.

“I tend to think we spend the beginning of Q3 chopping around $25,000. The ability of crypto to weather the storm will be directly related to the amount of interest income looking for a new home.”