Arthur Hayes predicts: ETH is bullish in the long term to $20,000, but caution is needed for a pullback in the fall.

Author: Crypto Banter

Compiled by: Odaily Planet Daily (@OdailyChina); Translator: Azuma (@azuma_eth)

Original Title: Arthur Hayes’ Latest Ten Thousand Word Interview: Autumn Correction, ETH Long-term Target of $10,000 to $20,000

Editor’s note: The industry heavyweight who loves to predict market trends, Arthur Hayes, co-founder of BitMEX, has come out again to forecast market movements. In a podcast discussion on Crypto Banter early this morning, Arthur Hayes shared his insights on topics such as the possibility of interest rate cuts, the trend of ETH, and the selection of altcoins.

The following is the full content of the podcast discussion by Arthur Hayes, compiled by Odaily Planet Daily. For the sake of reading fluency, some content has been omitted.

Powell and Interest Rate Cuts, and Market Trends for the Second Half of the Year

• Host: I saw some of your previous tweets, especially the one from August 2nd: “The tariff bill will take effect in the third quarter, and at least the market believes that no major economy can quickly create enough credit to boost nominal GDP - Bitcoin will test $100,000, while Ethereum will test $3,000…” Could you elaborate on your views regarding the market trends in the second half of the year? I think Powell must lower interest rates in September; he currently looks like he has a gun to his head. What do you think?

Arthur Hayes: I don’t think Powell has to do anything. I’ve talked to many macro strategists, and they’ve given a variety of reasons. Of course, some will mention the labor market situation; some will say that the U.S. may already be in a recession or will soon fall into one; others will say that tariffs will disrupt everything… I understand all this noise, but humans are strange, at some odd junctures, people suddenly decide to have “principles,” to have “dignity” and “face.”

If Powell really thinks of himself as “Volcker 2.0”, what could prove himself better than resisting Trump’s pressure? For instance, not lowering interest rates and insisting on serving his term until May 2026 before stepping down, rather than resigning early. This is completely possible. In such a case, a situation could arise where Powell overstays his term, combined with a bunch of Democratic appointees obstructing Trump’s policies. I don’t know the probability of this situation, but hardly anyone in the market has seriously considered it.

Of course, this does not mean that the Trump administration cannot find a way to “print money.” If the government really wants to print money, it can always find a way. So I am just reminding of the risks, and cannot provide a probability.

Clearly, I think we are entering a “gray area.” Friday is the Jackson Hole summit, and Powell is set to speak. Everyone is looking forward to him revealing the direction for September: will there be a rate cut? Or are the rates still not considered tight, and could they even go higher? No one knows what he will say. The Treasury is still issuing bonds, and the reverse repo balance has already hit zero. The market opened weak this week; for example, ETH fell by 10%, so I feel this is an uncertain phase.

Will the market at the end of the year be higher than it is now? I think it will be. If you are not using leverage, there is really no need to worry; perhaps it will drop another 15%-20% this week. If you have spare cash, this will be a good opportunity to buy the dip. I believe there will definitely be “money printing” before the end of the year. Bitcoin could surge to $250,000, and ETH could exceed $10,000. But before that, the autumn may be relatively volatile.

• Host: I agree with most of your points, which aligns with our judgment. There may be a wave of correction before the end of the year, and then we will see the real peak of the bull market. I will look at the data: CPI lower than expected, PPI higher than expected, employment data revised… Now the market gives an 83% probability that interest rates will be lowered. I think what you said about Powell being a “principled” person has some truth to it, but I still tend to believe he will lower interest rates in September, unless something unexpected happens.

Arthur Hayes: Why is lowering interest rates the “correct choice”? The data from the Bureau of Labor Statistics (BLS) is garbage, completely controlled by partisan interests. The CPI is also garbage, and statistical models can be manipulated at will. After Trump took office, the head of the BLS has been replaced, and this agency will eventually become his megaphone, so Powell can definitely say: “These data are unclear, we need more time and will temporarily maintain the interest rate at 4.5%.”

I just want to remind everyone from another perspective: don’t place your hopes on so-called “data”. Back in 2022, everyone said the data pointed to a recession, and Powell had to cut rates, but he directly raised rates by 75 basis points, hitting the market hard. So it’s entirely possible that we could repeat the situation of 2022—where the market expects rate cuts, but Powell suddenly delivers a “hawkish punch”, resulting in a market crash.

• Host: Well, I think there will be at least a 25 basis point rate cut in September, if only because he’s had enough of the external criticism.

Arthur Hayes: Are you sure? If he really wants to be “Volcker 2.0”, then this is exactly his chance to prove himself - to withstand the president’s overreach and insist on maintaining the independence of the Federal Reserve.

• Host: So what is your baseline judgment? Do you think there will be no rate cuts at all this year? Or will there be one or two cuts? What is your baseline forecast?

Arthur Hayes: My benchmark judgment is - I have no idea. I won’t heavily invest based on these false data points and get myself stuck. You can interpret this data from different angles, but they are all unreliable. I just feel that the market is expecting Powell to cut rates, but no one is seriously considering the situation where “Powell sticks to his principles for the first time,” directly telling Trump “screw you,” and not cutting rates in an election year.

Do you remember when Kamala Harris was campaigning back in the day? The labor market was good, unemployment was low, inflation was above target, yet the Federal Reserve still cut interest rates by 50 basis points to help her. There were even Federal Reserve officials who publicly stated, “The Federal Reserve will do everything it can to prevent Trump from being elected.” Although it wasn’t Powell who said it directly, other board members have made it clear. So, we might see a similar situation now: the market calculates an 83% probability of interest rate cuts based on the data, but Powell is thinking, “The Federal Reserve is above partisan politics, so we won’t cut rates.”

I’m not saying that this will definitely happen, I’m just reminding you that it’s a possibility. Personally, I wouldn’t trade based on the assumption of a “50 basis point rate cut by the Federal Reserve.” Because even if Powell doesn’t cut rates, the Trump administration has many other ways to stimulate the market. So there may be short-term pain, but this could actually prompt the Trump administration to use more aggressive and “unconventional” means to print money and advance their economic agenda.

• Host: So your benchmark judgment is that they will definitely find a way to “print money” before the end of the year?

Arthur Hayes: That’s right. They will definitely do something. I don’t know exactly what means they will use, but I am very sure that if Powell insists on not lowering interest rates, the government will definitely find a way to “squeeze out liquidity.”

Short-term and Long-term Price Predictions for ETH

• Host: Alright, so you mentioned that ETH will test 3000 USD. Do you think ETH will reach 3000 USD first, and then break the historical high?

Arthur Hayes: I don’t think so. At that time, I said ETH would test $3000 before it broke through $4000, and later Jane and I bought some ETH back. From a chart analysis perspective, it will definitely rise further; we cannot go against the market.

If Powell delivers a hawkish speech at Jackson Hole, I think ETH may first retrace to 4000.

• Host: In this cycle, the price of Bitcoin has exceeded its previous high by about 70%, while ETH is still struggling to break its previous high. Do you think ETH will experience a similar catch-up rally, perhaps rising 70% above its previous high, reaching 5000, 6000, or even 7000 dollars?

Arthur Hayes: I believe ETH will reach $10,000 - $20,000. As soon as it breaks through its historical high, the upward potential will be completely opened up. Additionally, as digital asset treasury companies continue to raise funds, if the assets they purchase keep hitting new highs, the fundraising process will become easier, and prices will continue to push upwards.

This mainly depends on how much funding these companies can raise and how much money the government wants to print. I’m not the type to rigidly adhere to a “four-year cycle.” How long this cycle lasts will depend on how they play it.

The Trump administration has not fully entered the “money-printing rhythm” yet. They are still paving the way, testing various methods to see which one works. They are sending signals of “we want to heat up the economy,” throwing out various ideas to see what can take root. Once the nominees for the Federal Reserve Chair and the Board of Governors are determined, such as whether Trump can fire Powell and install his own person - this may not become clear until mid-next year.

Once this is determined, for the rest of 2026 until the end of Trump’s term, they will print money like crazy. Because without printing money, you can’t win the election. The Democrats need to print money, and the Republicans have to print money too. Otherwise, his supporters and allies won’t benefit, how can he be re-elected?

• Host: So you think that this bull market could be prolonged. In other words, the traditional four-year cycle theory may become invalid. Trump’s money printing started a bit slowly, but once the policy fully kicks in, this cycle could extend to 2027 or 2028?

Arthur Hayes: That’s right.

• Host: Wow, that’s really amazing. You said ETH could reach 10,000–20,000 dollars, not this year, but in the next three to four years, right?

Arthur Hayes: Yes. But my baseline judgment is that we will definitely have a big bull market, and all financial assets linked to Trump’s policies will benefit. Because he has to win the election in 2026. The only thing voters care about is their wallets: Am I richer today than I was yesterday? If not, I will vote for someone else. So they chose Trump over Biden, and the same logic will apply to the congressional elections in 2026 and the presidential elections in 2028.

The Democratic Party will also clearly shout “we need to print money,” while the Republican Party will lose votes if they do not distribute benefits. Therefore, both sides will desperately increase money supply.

• Host: Haha, you’re almost making me want to vote for the Democrats. If they’re going to throw around money, I only care about the money anyway.

Arthur Hayes: Yes, in the end, it’s all about money; the party affiliation doesn’t matter.

ETH vs SOL

• Host: ETH has recently captured the grand narrative of Wall Street, and everything seems like a perfect chain reaction. First, Circle went public, which was much better than expected, drawing everyone’s attention to stablecoins; then, the stablecoin narrative naturally shifted to ETH; next, Joseph Lubin and Tom Lee both loudly advocated for ETH; as a result, ETH has become the new darling of Wall Street. It has become a platform for “real-world assets.” Moreover, ETH has also gained prominent leaders, whom I refer to as “Batman and Superman”—Lubin and Tom Lee, one who speaks every day with a microphone on CNBC and the other a founding elder of ETH… The question I want to ask is: if from now until the end of this cycle, you can only put your money in one asset, would you choose SOL or ETH? Because until two months ago, everyone was bearish on ETH, almost unanimously supporting SOL. Now suddenly, ETH is dominant again.

Arthur Hayes: To be honest, both will rise. The question is just which one will rise more. I am a project advisor for Solana, so I naturally believe that SOL will rise, but ETH is a larger asset and funds are pouring in faster. SOL and ETH will be an interesting competition; one side may rise faster, but that doesn’t mean the other side will lose; they will both go up.

• Host: From the perspective of portfolio allocation, would you consider holding a larger position in ETH?

Arthur Hayes: Yes, I will lean more towards ETH.

Investment Logic and Collapse Risks of Cryptocurrency Vault Companies

• Host: The shift in attitude on Wall Street is indeed astonishing. What do you think about these “crypto treasury companies”? Some people are hesitant about whether to hold ETH directly or buy shares of these companies, such as SBET or BMR, which sometimes trade at 1.8 times or even 2 times their net asset value. Would you advise crypto investors to buy these stocks?

Arthur Hayes: This trading logic is very simple; you are essentially spending $2 to buy an asset worth $1 because you believe in the power of passive index funds. For example, I just had a meeting with the team from UPXI (a Solana treasury company), and I told them to thoroughly research which indices might include their stocks, what mandatory buying rules fund managers have, and that the average trading volume, market capitalization, and listing exchanges must meet the standards.

As long as these conditions are met, fund managers must buy your stocks, regardless of what the company is actually doing. This is the MicroStrategy model, a method pioneered by Michael Saylor. They force capital inflow by entering various indices.

• Host: Isn’t this going to create leverage risks in the market? For example, if you have 1 dollar of ETH, but it is driven up to 2 dollars by some companies. Then there is 1 dollar of “air” in between. In Michael Saylor’s case, he initially used money from bonds and convertible bonds to buy Bitcoin, which could provide returns to shareholders while returning the principal to bondholders. But now, most of the new generation treasury companies have learned their lesson; they all say, “We don’t want leverage,” because Michael Saylor has already proven that debt can be recalled, while different classes of stocks do not carry this risk. So what confuses me now is, why would anyone spend 2 dollars to buy an asset worth 1 dollar? I find it hard to find a reasonable explanation.

Arthur Hayes: The answer is simple: because you believe it will go exponential. Passive fund managers don’t care about the price, don’t care about the net value; the system requires them to buy, so they must buy. They must have all the stocks bought before the close. Whether it’s 1 dollar or 50,000 dollars, they don’t care.

• Host: I understand, but I still think it’s risky. For example, if the market crashes one day and the stock prices of these companies drop from 2 times their net value to below their net value, no one will buy them anymore. At that point, they will lose their reason for existence and can only liquidate their underlying assets, which will lead to a round of “deleveraging collapse” in the crypto market.

Arthur Hayes: (Collapse) Theoretically, this is possible, but in reality, it’s not that easy. Because these are not ETFs, but companies. If the company’s management wants to “stubbornly resist,” you must first buy enough shares, convene a shareholder meeting, and force them to liquidate. This process is very expensive and time-consuming, potentially taking years, and may involve lawsuits.

So I’m not too worried about the so-called “chain collapse.” Unlike ETFs that can be redeemed on the same day, treasury companies are more complex.

• Host: But do you agree that by the end of this cycle, there will be many opportunities to buy these companies at very low prices, just like when Grayscale was at a 50% discount back in the day.

Arthur Hayes: Yes, but back then it took a long time and a lot of cost to actually realize arbitrage.

• Host: My concern is that not every team is Michael Saylor. When certain companies can no longer hold on and start liquidating their crypto assets, that will mark the end of this cycle.

Arthur Hayes: I agree. At that time, some treasury companies may be acquired at a net asset discount or have their assets liquidated directly. Those leading projects will passively absorb capital, while the laggards will be eliminated.

• Host: Which assets do you think can attract the attention of Wall Street and are worth them setting up treasury companies? Clearly, BTC, ETJ, and SOL all have potential. I’ve also seen treasury companies emerging around BNB, TON, HYPE, and ENA. How far do you think this trend will develop? Will it cover the top 100 tokens? Or the top 20 tokens? How interested do you think Wall Street currently is in cryptocurrencies?

Arthur Hayes: As long as the market continues to rise - I don’t know exactly how much the bankers take from these trades, but it’s definitely no problem for the sponsors to take 3%, 4%, or 5% - this is a fantastic business for investment banks, as long as there’s profit to be made, they will build treasury companies for all assets.

Selection and Logic of Altcoins

• Host: Let’s talk about altcoins. The last time I saw you during Dubai 2049, you told me to buy ETHFI, and it helped me buy a new house and also pay for my child’s tuition. So which altcoins are you looking at now? For example, Ethena (ENA), do you still have a positive outlook on it? Their stablecoin issuance has doubled, from 6 billion to 12 billion, and as the market rates have risen, the protocol’s yield has also recovered; it seems like this project has done a lot of things right.

Arthur Hayes: Yes. I have a macro logic regarding stablecoins, and I will be speaking at WebX in Japan next week, where I will also publish an article. My point is that people’s imagination about stablecoins is still not big enough. US Treasury Secretary Yellen will use stablecoins to reverse the trend of “de-dollarization”—that is, to bring back the global offshore dollar flow to the US, while also providing banking services to so-called “global south countries” (i.e., developing countries mainly located in Asia, Africa, and Latin America), even if local regulations do not allow it.

Stablecoin issuers need to make money from interest rate spreads, so they will use users’ funds to buy U.S. Treasury bonds. Assuming that by 2028 the circulation of USD stablecoins will reach 10 trillion dollars, what does that mean? I will elaborate on this part in the article.

Ethena’s model is to package the “funding spread” in the crypto market into a stablecoin that inherently generates returns. Essentially, you are lending money to speculators (those who go long) and earning returns. This trading model has existed in the crypto market for over a decade; it is just that the Ethena team has packaged it as a DeFi product to allow everyone to participate easily.

So I believe Ethena can earn over a hundred million dollars in interest income each year through this path. When they start to buy back tokens, ETH will skyrocket again, and the price of ENA will definitely soar. My prediction is that Ethena will surpass Circle in the next 12 months, becoming the second largest stablecoin after Tether.

• Host: That’s a bold prediction. Listening to your analysis, I also agree. Let me ask again, in reality, there will be a bunch of stablecoins, like PayPal USD, USDT, USDC, Ethena, and Stripe’s stablecoin. So why would people swap them around? In what scenarios would you exchange USDT for USDC or for PayPal USD?

Arthur Hayes: The key is not the exchange, but the distribution. Social media platforms are the “spearhead”; who will open accounts for those who have not yet been exposed to the dollar? The answer is Facebook (Meta) and X (Musk’s Twitter), which will launch wallets. At that point, which stablecoin gets chosen will depend on the distribution capabilities of these platforms.

• Host: You didn’t mention Telegram? It has 1 billion users.

Arthur Hayes: The chain of Telegram seems a bit fake to me, with no real activity and legal troubles. I don’t think the U.S. government would hand over the distribution rights of the “dollar policy” to Telegram. It’s more likely to be given to “American capitalists” like Musk and Zuckerberg, who pay taxes, make donations, and are controlled.

For example, Filipinos really want to use US dollars, but local regulations do not allow Citibank and JPMorgan to serve them directly. So the Trump administration could support WhatsApp to launch “USDT payments,” allowing Filipinos to receive dollar remittances directly through WhatsApp. This kind of “dollarization” cannot be stopped by anyone.

Once everyone has stablecoins, the next step is to spend money. For example, buying coffee at 7-11 or using a card at convenience stores. Domestic bank cards may not work well overseas, but Ether.fi is very useful. I have the Etherfi app on my iPhone and a physical card, so I can swipe it anywhere. Once hundreds of millions or even billions of people get US dollar stablecoins through Facebook and X in the future, they will also need spending scenarios. Ether.fi can fulfill this demand and allow stablecoins to be spent.

• Host: Alright, what about Hyperliquid? What’s your logic?

Arthur Hayes: I believe Hyperliquid will become the largest exchange in the world, surpassing Binance. As stablecoins become more popular, a large number of new users will enter, and their only way to combat inflation will be through speculation, with on-chain derivatives exchanges being the venue for that speculation. Hyperliquid offers low-cost, high-liquidity contracts and repurchases 97% of the profits in tokens, directly benefiting users.

For example, when a project is about to go live, it usually has to pay 7%-10% of its tokens to centralized exchanges (like Binance) as listing fees. However, on Hyperliquid, it costs almost nothing, and liquidity can be obtained immediately. This way, project parties have no need to “give away” their tokens to centralized exchanges. As a result, Hyperliquid will gradually occupy the new issuance market.

• Host: I understand. In the past, to earn higher returns, I would invest in some small-cap altcoins, but this time I chose to focus on leading projects like ENA and LINK, and then add a bit of leverage. I think this way the risk-reward ratio is better.

Arthur Hayes: Yes, I’m now only investing in projects that can bring real cash flow. I no longer pursue a thousandfold return because that means enduring a bunch of projects going to zero; I just want to hold my investments comfortably after significant capital comes in. For example, Hyperliquid repurchases 97% of its profits in tokens, EtherFi has already started repurchasing, and Ethena will soon launch as well. The profits from these protocols will be distributed directly to us token holders, rather than being intercepted by the protocol teams.

Host: I agree with your logic. What about Chainlink? Recently, it has suddenly become a favorite on Wall Street; is it on your radar?

Arthur Hayes: To be honest, I haven’t been paying much attention. I haven’t done much in-depth research on oracles, and I’m not sure if their current positioning is still just focused on being an oracle.

NFT and CryptoPunks

• Host: Alright, before I let you go, I have to tell you that I finally bought a CryptoPunks, even though I previously said “I would never buy one.” But that day, you and Raoul Pal were both saying that CryptoPunks would outperform ETH, and I couldn’t help but buy one. Do you still feel optimistic about it?

Arthur Hayes: Of course. Because everything humans do, aside from survival necessities, is an “identity game”. In reality, symbols of identity are artworks, luxury cars, and big houses; online, symbols of identity are these scarce, story-laden digital collectibles. CryptoPunks is the most representative NFT project, and its status is irreplaceable. Therefore, I must hold CryptoPunks; it will always be the “first”, and CryptoPunks has good liquidity, being the most marketable series in NFTs.

When ETH rises to $20,000, many wealthy people will need to flaunt their identity. They might not show off designer belts, but will say, “Look, I have a CryptoPunk, a pixel avatar that cost me millions.” This is the new symbol of identity.

……

The following will be personal life discussions and pleasantries, so I won’t translate it here. Those interested can watch the original video directly.