What's your realistic top for Bitcoin in this cycle?
Which three coins actually outperform Bitcoin this cycle?
Zcash, Hyperliquid, and Near.
What's the highest conviction bet that you are taking right now?
A long Hyperliquid. I think Hyperliquid could be the largest exchange in the world because anyone anywhere can trade anything. And now they can reach the entire world.
What's the price prediction for that?
$150 price target on Hyperliquid by the end of
Meet Arthur Hayes, co-founder of BitMEX, one of the biggest crypto trading platforms in the world. From building a billion-dollar company to now running his family office, Maelstrom.
Arthur is known for predicting big market moves early and saying what most people in crypto won't.
How does your portfolio look like right now?
90% Bitcoin, little bit of ETH, Zcash, and Hyperliquid. I think Zcash will be 10 percent of the value of Bitcoin. Yeah, I still think Ethereum is the best L1 out there.
Outside crypto, what's one bet nobody is paying attention to, but they should be? In worst-case scenario, how low can Bitcoin realistically go?
Yes, in worst case.
So, Arthur, how are you?
I'm great, and good to see you. It's like seeing you for a very long time. So, welcome to the Sujal Show. It's a big day for us, Arthur.
And what was the first moment in your life when you make a huge money, and how did that change or shape your mindset?
BitMEX started making really good money by the end of 2017. And yeah, it's great. You can go out with your friends, have drink nice wine, go to nice restaurants, and you know, live life like it should be lived. So, yeah, it was probably 2017 is when BitMEX started making a decent amount of money and me and my co-founders we could pay ourselves a decent salary and go and enjoy ourselves.
And as you have mentioned about the perps that everyone love right now in crypto, do you think like many people associate perps with gambling? How someone can get rich with crypto without gambling?
It takes time and patience. So, I think a lot of traders or people get into crypto because they see somebody on social media and they've got a nice car, a nice watch, a nice house, whatever it is and they lie to you and they tell you that they made their money very very quickly because they traded this coin or they bought this person's course or whatever it is that they're selling.
And if you want to be a profitable trader over time, it takes dedication. The best traders are always thinking about the positions, understanding the markets that they're trading. Depending on your trading style, if you're a very short-term volatility swing trader, you might be looking at your computer all day, right? And so, I think a lot of people have to understand that this is a full-time job to be a professional trader. And if you're not approaching it in that manner, then using leverage, using perpetual swaps, using these products is basically a short way to lose all your money very very quickly.
So, I think it takes dedication, it takes time, there's no shortcuts, there's no secret formula, there's no secret course that you can take. It's really about becoming an expert, having understanding yourself and your own psychology, and then creating a trading style that matches the lifestyle that you want to live.
According to you, like as you have introduced perps in crypto and you have insights of millions of traders. What's the 90% of traders do that make them lose money and what's the 10% profitable traders doing differently?
Your emotions. You're always trading against yourself. And so, again, everybody has a different style, everybody has a different life, and so you can't say that this trader's style will match yours, right? And so, it's a personal discovery of yourself, a very internally focused game that you're playing because the market's hostile. The market's there to take your money from you. And so, you have to be able to have a particular strategy that makes sense for how you operate as a human being, and then consistently execute that strategy over time. And then, that's what makes a good trader, but most people think that oh, I'm going to get into trading, I'm going to make a bunch of money very, very quickly, and then I don't have to work anymore. That's not how it works, right? The best traders are always working at their craft, making themselves better at what they're doing.
And it's a very time-intensive process. I don't really day trade or trade, if you will, that much anymore because it takes a lot of time. I don't want to stare at my computer all day, right? So, I think that people need to understand that the best traders, this is their profession. So, if you're not going to make trading your profession, if it's just a hobby or entertainment, then you accept that either one, you're just going to lose your money, and you might be okay with that because you're having fun doing it. Or two, choose a different strategy. Maybe you're just a buy-and-hold investor, and you're holding things for months, years at a time, and you're not trying to make a living trading something.
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Are you using AI for your trading?
I use AI for research. I don't use AI to place trades for me.
I recently heard that like in 5 years, 99% of traders will be replaced with AI. So, what do you think on that?
I think that AIs will help you execute trades. I think that if you might have an automated trading strategy that an AI might oversee and run, but I still think trading is still going to be a human pursuit. There will still be billions of humans coming to the markets and placing orders. Now, whether or not they're augmented with AIs, that depends on the trader's style, right? For my style, I don't need an AI to execute my trades. I don't really place that many trades that often, but if you have some strategy that requires you to use a computer to place and cancel trades very, very quickly, then yeah, of course you'll use an AI.
Okay. And someone if don't want to become a professional trader and they are living on a paycheck and whenever that they get paid, if they want to build a real wealth in crypto, how should they allocate their money in crypto?
I mean, I guess I'm not a financial advisor. Again, I think that you have to figure out an amount of money that you're willing to lose. And if you don't want to stare at your phone all day looking at the price of whatever crypto, choose things that are not as volatile, right? So, obviously Bitcoin is the reserve currency of crypto, the safest of cryptos, it's been around the longest, but again, it doesn't go up the fastest as maybe some meme coin or some other shitcoin. So, again, if you're trying to build long-term wealth, you don't want to look at your phone all the time, you probably want to stick to things like Bitcoin in that sort of area of the market capitalization because you're not going to wake up one day and find that your coin is worth zero because you got rugged. But again, you're not going to make 20x money in 2 weeks. So again, you have to choose the risk profile that you want to have.
How does your portfolio look like right now?
About 90% Bitcoin, a little bit of ETH, Zcash, and Hyperliquid.
And like Ethereum has not performed well in recent times. Do you think it's still a long-term bet?
I think that Ethereum is the best decentralized computer that we have right now. And if you take a look at all the biggest DeFi primitives, they all started on Ethereum. Every other blockchain copies the products and services that are launched on Ethereum afterwards. And so, I still think it has a mindshare of developers. It still is the most secure chain by the total value of what's at stake. And so, I think it's always going to be there. Whether or not it's the best price performer, I think there has to be some economic issues worked out between L2s and how fees are shared. We'll see if there's any changes. But yeah, I still think Ethereum is the best L1 out there.
And you also mentioned about Zcash like you have predicted that it may go to like $2,000 to $3,000. Do you still believe in that?
I still believe long-term that we need fully private money over the internet. That is Zcash. At least that's what I think is the best representation of that. And yes, I think Zcash will be 10-ish percent of the value of Bitcoin in a reasonable amount of time, say within the next few years. Basically because we want the ability to have anonymized transactions on the internet in an age when it's very easy for the government using AI tools and the data sets of the big tech providers to deanonymize transactions. And for some people, that's unacceptable. And that's why they save in Zcash and will continue to increase the allocation of Zcash in their portfolios.
Well, like recently, many people mentioned that Zcash and Bitcoin can have a quantum computing risk. What's your thought on that?
I mean, there's a lot of discussion going on about the quantum resistance of Bitcoin and other chains like Zcash. We'll see what core developers come up with on Bitcoin in terms of how to protect the coins. I'm not particularly worried about the quantum threat. I think we have a lot of people, very smart people looking at it. There is an impetus to find a solution. And I do think there's a lot of FUD out there about how quickly this can happen and how economically feasible it is.
And right now what's the highest conviction bid that you're taking right now?
Long Hyperliquid. Okay, what's your price prediction for that?
I wrote an essay a few months ago with a $150 price target for Hyperliquid by the end of August predicated on a continued expansion of revenues primarily coming from the permissionless markets like the oil markets and the Nasdaq and S&P markets that have been launched on Hyperliquid using the HIP-3 protocol.
Okay, what makes you so bullish on Hyperliquid? Like how big Hyperliquid can get?
I think Hyperliquid could be the largest exchange in the world because now with the internet and with a decentralized blockchain anyone anywhere can trade anything as long as they have the internet. And now you can trade 10x leverage S&P, you can trade 100x leverage Bitcoin dollar, and with permissionless markets anyone can launch a market. And now they can reach the entire world. Whereas the traditional system is very gated. Every country has their own different gatekeepers. Certain people are not allowed to trade certain things. And now with Hyperliquid everyone can trade anything. As we have 8 billion people in the world and now they have access to any type of financial product that they want. So this is why I believe that the decentralized exchanges are going to be the largest body of trading exchanges in the world led by Hyperliquid.
Okay. Recently Gracy Chen, the CEO of Bitget, on our podcast stated that Hyperliquid is kind of centralized. What's your thought or take on that?
Why did she say that? What was her evidence of it being centralized?
There was a jelly incident in which they kind of removed some listings or something like that. Based on that she stated.
Yeah, I mean maybe nobody cares. Let's just put it that way. Decentralization, as we were finding out very quickly with the whole Layer Zero and Arbitrum thing is that nobody cares about decentralization if they get the product that they want. What do people want right now? I want to trade the S&P at 10:00 p.m. on a Saturday with 20x leverage.
Does Hyperliquid offer that? Yes. Are they decentralized? Maybe. I don't know.
Doesn't matter. No. Doesn't matter right now. We'll see if they get attacked by a government state actor or there's some sort of hacking attempt, then we'll see if they're properly decentralized or not. But until that point in time, it doesn't matter and nobody cares. And so, I think a lot of the centralized exchanges their only thing that they can say about Hyperliquid is, 'Oh, it's centralized. They're just like us.' Except that I don't need to go through a whole onboarding process like I would with a Bitget. I can just connect my MetaMask and use my USDT or USDC and now I'm trading in a few minutes. So, that's the experience that Hyperliquid offers. When you guys offer the same experience, then we can talk about decentralization or not, but I think it doesn't matter.
So, like as you stated, like recently Arbitrum had like 70 million dollars frozen by them. Like whenever new person come into crypto and they see this beautiful decentralized world, we get this promise of decentralization. So, do you believe decentralization is even real or it's just a marketing gimmick?
I think for the majority of crypto, it's a marketing gimmick. For Bitcoin, it's real. For Ethereum, at the layer one level, it's real. For everything else, it's mostly marketing.
Do you feel so like Bitcoin is truly decentralized?
I mean, decentralization is sort of, you know, it's like perfection. You'll never get there, but you're always trying to strive for it, right? But it's the most decentralized money that we have, right? There's nobody that can do what Arbitrum did. If somebody steals billions of dollars of Bitcoin, you can't go and call someone up and say, 'Can you freeze the blockchain so I can get my Bitcoin back?' Can't do that. It's not possible. So, if that's not possible, then it's meeting the test of decentralization that really matters.
Let me ask you like if you go to Fresh Capital, you will choose Bitcoin or HyperLiquid?
And when it comes to Bitcoin, do you think it's already bottomed or like the rally just has started recently?
I think we most likely bottomed at 60,000. I think that the credit impulse will continue to increase as the central banks and the commercial banks continue to print money to help countries around the world finance their war efforts. But, I do think that there is a risk of this AI deflation where a lot of people lose their jobs and no longer are spending because AI does knowledge work better, faster, cheaper than the mediocre, you know, bottom 25% of the workforce in the knowledge working profession. So, there's that risk out there, but I think on balance you probably bottomed at 60,000. And so, we might not reach 125,000 anytime soon, but I'm not super bearish in terms of we're going to go to 30,000 or some sort of number like that.
And what's the future predictions for Bitcoin?
I mean, I think end of the year, let's say we reach back to October last year at all-time high. So, let's call it 125,000.
And what like also recently like you have stated that it can go to 500,000. What's the timeline that you're looking for?
I mean, I think that the major event that I see in the future is the 2028 US presidential elections. I think that at least in the United States, they're going to print a lot of money to try to win an election on both sides. So, obviously the Republicans are in power right now, that's Trump's party, and he's going to go out there and try to juice the economy with printed money, whether that's from the banking system by encouraging them to lend more, or that's a central bank or the treasury. However he makes it happen, he's going to make sure that people get things for free, paid for with printed money, and that's going to help cryptos and all sorts of different assets rise in price. So, I think that all financial markets are still in the bull market mode, and 2028 will be the sort of check-in period. Okay, well, if another party wins at least in the United States, and there'll be some other elections around the world, and they start saying, 'Oh, we want to do austerity. We want to reign in the budget. Spend less.' Then we could see a large sell-off in risk assets around the world.
So, 2028 could be the very bullish year for Bitcoin.
Well, yeah. And then, it could be very bearish right after that if somebody else wins who says, 'I don't want to print any more money.'
So, you are connecting everything to like printing money, liquidity, right?
Okay, so, US government or all over the globe?
