Fiat money is toilet paper, bitcoin is the answer, says former BitMEX CEO

If anyone has particular comparisons, it’s Arthur Hayes. Hayes is the former CEO of crypto derivatives exchange BitMEX, but these days he regularly writes analysis. Hayes has very strong opinions, which is why his articles often stand out. This time he details the connection between his grueling kitesurfing progress and the Federal Reserve – and why fiat currencies are just as valuable as toilet paper.

Federal Reserve still causing inflation

According to Hayes, the Federal Reserve is trying to kill two birds with one stone, but the analyst says the path is wrong. The central bank is doing the same at the same time Quantitative Easing (QE) or quantitative easing and so on quantitative tightening (QT).

During the Corona pandemic, the Federal Reserve implemented a QE policy and started printing money. As a result, inflation rose and the Fed switched from QE to QT to prevent inflation from spiraling out of control. Because this makes it less attractive for the banking sector to lend money, since it can now also earn a lot with government bonds.

However, due to the high interest rates, the opposite is actually happening, says Hayes. Because now investors in bonds are getting paid better, while the central bank is using QT to try to prevent more fiat money from being thrown into the financial market.

This would result in the market growing by $32 billion each month instead of shrinking. Hayes thus likens the Fed’s policies to his surfing adventures, where he tries to stay on his feet in order not to lose the battle against the wind.

Bitcoin is the solution to Fed policy

As long as the Fed doesn’t change this policy, technology stocks and cryptocurrencies will continue to rise, the former CEO concludes. Furthermore, nothing would be more profitable than “parking” money with the Federal Reserve.

Hayes believes Bitcoin (BTC) was created to do just that, as cryptocurrencies have a limited number of coins. “Bitcoin is the solution to a broken, corrupt and parasitic banking system. If (central banks) produce more “fiat toilet paper” then the value of bitcoin, measured in this fiat currency, will increase. Because of this, Bitcoin is already up 18% since March,” Hayes said.

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