Hayes’ Playbook: Portfolio for the Elections and Beyond
Pre and Post Election Playbook
Arthur Hayes just called the election a distraction
He’s betting on an impending flood of liquidity from global central banks to ignite crypto’s next bull run.
Here is a masterclass playbook to his portfolio (already positioned ahead of elections) 👇🧵
Ladies and gentlemen, grab your popcorn because Arthur Hayes, is back.
In a recent appearance on the “Unchained” podcast, Hayes delivered his “goldmine” thoughts. Let’s dive into his latest musings👇
Insight 1: Election Uncertainty Is Just Noise
Hayes dismantles the view that the election result holds the keys to market volatility, suggesting that the fundamental approach of either candidate is to flood the economy with liquidity. Whether it’s Trump or Harris, Hayes argues that politicians will continue to inflate the economy with cheap money—a playbook that has persisted since Reaganomics took center stage in the 1980s. In his eyes, the U.S. election boils down to a contest over who will control the next phase of money distribution, with the endgame of satisfying their political bases.
However, Hayes presents a calculated warning: the real risk comes if election results are contested, potentially throwing the market into short-term chaos as questions of legitimacy erupt in the streets and courts. If the losing side refuses to accept the results, markets may see a knee-jerk reaction as investor confidence momentarily falters. Yet Hayes reminds us that this is a minor detour rather than a serious impediment to crypto’s longer-term momentum.
Insight #2: Bitcoin Over Altcoins
Hayes doesn’t just casually endorse Bitcoin—he advocates for it as the least volatile option in an increasingly volatile world. Betting on lesser-known altcoins may seem attractive, particularly when high-risk assets are outperforming in bull markets, but Hayes advises caution. The liquidity of Bitcoin provides a failsafe, ensuring that if an investor’s election prediction doesn’t pan out, they’re less likely to face steep losses in a low-liquidity scramble to exit.
Altcoins, while potentially profitable, are not where Hayes would wager his capital, especially amid election-induced volatility. According to his view, altcoins thrive only as long as Bitcoin sets the tone. Should Bitcoin rally post-election, he anticipates a subsequent rotation into altcoins—but stresses the importance of staying nimble, with positions in assets that allow swift exits.
Insight #3: China’s Economic Easing Changes Crypto Trajectory
Amidst the din of U.S. election coverage, Hayes points to a significant macro factor that could alter crypto’s trajectory more profoundly than any electoral outcome: China’s inevitable pivot to monetary easing. China’s economic powerhouse status is supported by massive lending to the property sector, and as this bubble shows signs of strain, Hayes sees the People’s Bank of China (PBOC) stepping in to inject liquidity, reminiscent of the U.S. Federal Reserve’s post-2008 rescue operations.
This looming liquidity surge could provide Bitcoin and other scarce assets with the tailwinds they need to sail toward new highs. By flooding the market with liquidity, China could drive inflation higher globally, particularly as its loose money flows into risk assets. And with the Fed likely to pivot to easing as well, Hayes implies that crypto could see a multi-year bull run driven by fiat dilution on a global scale.
Insight #4: The Fed Ending Quantitative Tightening
Hayes directs our attention to another critical piece of the puzzle: the Federal Reserve’s balance sheet management. With the U.S. government’s mounting deficit and a national economy reliant on short-term financing, the Fed’s role in keeping liquidity flowing becomes paramount. If the Fed curtails quantitative tightening (QT) or reverts to quantitative easing (QE) as the banking system’s reserves dwindle, risk assets will likely benefit. Crypto markets, traditionally sensitive to shifts in monetary policy, could see a considerable boost.
Herein lies a key insight for crypto investors: Federal Reserve policies, more than political rhetoric, shape the liquidity environment for risk assets. If QT ends and QE resumes, the ensuing liquidity will wash over financial markets, lifting Bitcoin and other finite assets as investors seek hedges against a devalued dollar.
Insight #5: Rise of Meme Coins and the “Speculative Asset Class” Psychology
On the more speculative end of the spectrum, Hayes acknowledges the rise of meme coins like Goat, noting their allure within a financial ecosystem prone to viral trends. However, he warns against chasing the ephemeral gains meme coins offer, suggesting that their value proposition remains more entertaining than enduring. For those who understand the psychology behind meme coins, their high volatility can be managed—but for Hayes, such assets represent high-stakes gambles, better suited to those who can afford to lose big.
Insight #6: Practice Patience in a Politicized Market
Hayes’ strategy offers a call to action for the crypto-curious and veterans alike: patience and prudence in an era of inevitable fiat debasement. Rather than getting swept into the hype cycles of election speculation, he encourages us to remain grounded in a long-term thesis centered on hard assets like Bitcoin. His approach suggests that while political landscapes shift, the fundamental drivers of monetary expansion and currency devaluation remain constant.
As crypto markets continue to mature, Hayes’ perspective underscores the importance of clear-eyed focus amidst distractions. By filtering out the noise, we can better navigate the intricate dance of politics, macroeconomic trends, and digital assets, ready to seize the next opportunity on the horizon.
Conclusion
Arthur Hayes has once again stirred up the conversation, and this time, he’s setting his sights beyond the election buzz. His perspective is a timely reminder for anyone in crypto or finance: while politics can spark short-term turbulence, the real market movers are far more profound. Hayes sees liquidity as king—whether it’s from the Fed, China, or other central banks, he argues that the big picture is shaped by monetary expansion and inflationary pressures rather than political winners or losers. For the crypto faithful, this message hits home: stay steady, watch the macro trends, and don’t let election jitters cloud the longer game.