BitMEX co-founder Arthur Hayes believes the Federal Reserve will lose its quest to beat inflation, ultimately benefiting “risk assets of finite supply,” such as Bitcoin.

In a blog post published on Wednesday, the essayist argued that the Fed is sucking money from one area of the economy while injecting money into another.

As long as the Fed’s strategy to combat inflation remains “quixotic,” assets like Bitcoin will likely rise in the long run.

“Bitcoin has a finite supply, and therefore as the denominator of fiat toilet paper grows, so will Bitcoin’s value in fiat currency terms,” Hayes wrote. Aside from big tech and crypto, the ex-CEO believes nothing will yield a better return for investors besides parking their money at Fed and earning nearly 6% yield.

He went on to explain why the Fed’s tactics have been flawed.

Specifically, by continually raising its Reverse Repo Program (RRP) and Interest on Reserve Balances (IORB), the central bank is forced to pay out billions more per month to depositors, which counteracts the Fed’s effect on the money supply from quantitative tig

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Author: Andrew Throuvalas

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