BitMex Founder Arthur Hayes and EtherFi Founder Mike Appear on Rollup Network Show
In-depth discussion on the current macroeconomic landscape, whether the crypto market has bottomed out, and the future of Bitcoin and Ethereum.
(Background: Arthur Hayes: “Now” may be the last chance to buy Bitcoin below $100,000!)
(Background Supplement: Arthur Hayes: Bitcoin will enter “a mode of only rising, not falling”!)
Amidst the global macroeconomic uncertainties and market fluctuations triggered by U.S. policy directions, cryptocurrency investors are attempting to clarify market bottom signals and future investment themes. The Rollup show invited Arthur Hayes, who has unique insights into macro trends, and Mike, founder of EtherFi, focusing on DeFi infrastructure and applications, to jointly analyze the current situation. They discussed topics ranging from the Federal Reserve’s movements, the implications of Trump’s policies, the competition between Bitcoin and Ethereum, the value of fundamental investing, and how EtherFi is creating the next generation of DeFi applications, presenting the audience with a deep dialogue that combines macro perspectives and micro insights.
Key Points Summary
Market Bottom Signals and Easing Expectations
Hayes believes that the market has bottomed out at $74,500, citing reasons such as the Trump team’s swift concessions on tariffs and strong signals released by Fed officials (such as the Boston Fed and Deputy Secretary of the Treasury Bentsen) indicating that they will spare no effort to ensure the normal functioning of the market. He cautioned investors against clinging to the old script of “waiting for interest rate cuts or restarting quantitative easing (QE),” as new liquidity injection methods may be entirely different, and missing the opportunity could result in Bitcoin rising to $500,000.
New Liquidity: Treasury Buybacks
The key focus is not on traditional QE, but on the U.S. Treasury’s “Treasury Buybacks.” While this is not equivalent to QE, it has a similar effect, providing more leverage to institutions that can purchase Treasury bonds (especially hedge funds engaging in basis trading), allowing the Treasury to successfully issue trillions of dollars in new bonds while the deficit continues to rise, thus maintaining market operations.
MOVE Index as a “Thermometer” for Policy Intervention
Hayes emphasized that the bond market volatility index (MOVE Index) is crucial for observing policy responses. Historical experience shows that when the MOVE index exceeds about 140, decision-makers almost immediately take action to stabilize the market. With the increasing leverage in the financial system, this trigger threshold for intervention may continue to lower. The unpredictability of Trump’s policies will increase market volatility, which is beneficial for Bitcoin, as authorities cannot bear the systemic risks brought by high volatility.
Bitcoin Potential to Reach One Million Dollars, Gold Also Strengthening
Hayes reiterated his view that Bitcoin is on its way to $1 million, considering the current rebound only as a starting point, analogous to the sixfold increase triggered by Yellen’s reduction of reverse repos after the FTX collapse at the end of 2022. He believes that both gold and Bitcoin reflect the same phenomenon: distrust in the current fiat currency system and geopolitical risks (such as the U.S. freezing Russian assets). However, the buyer demographics differ (central banks prefer gold, while retail/global individuals prefer Bitcoin). He anticipates that gold may reach $5,000 faster than most people think.
Bitcoin Dominance May Continue, Institutional Funds Leading
Although Ethereum and other public chains also have positive factors, Hayes believes that Bitcoin’s dominance may not have peaked in this cycle. The main reason is that traditional financial institutions, family offices, and high-net-worth individuals, realizing the necessity of holding uncorrelated assets (such as Bitcoin and gold) to hedge against systemic risk, typically first turn to Bitcoin before funds may spill over into other higher-risk crypto assets. Cantor Fitzgerald mimicking MicroStrategy’s strategy is an example.
Ethereum Has Found Its Bottom, Rich Fundamental Themes
EtherFi founder Mike is relatively optimistic about Ethereum, believing its price has bottomed out. Despite previous negative sentiment towards Ethereum, significant and exciting developments are occurring at the protocol level (Layer 2 development) and application level (such as EtherFi and Restaking). He anticipates that the ETH/BTC exchange rate will reverse, and strategies mimicking MicroStrategy’s approach to holding ETH are gradually gaining traction.
Definition of “Return to Fundamentals”
Cash Flow and Value Return: Mike defines the “fundamental season” as the period when projects with real users, generating actual cash flow and revenue, start to materially influence token prices by returning part of their value to token holders (for example, through token buybacks). He believes the market was once filled with overvalued “air coins,” but ultimately “gravity” will take effect.
Value Capture Mechanism Becomes a Key Discipline, Criticism of Uniswap Model:
Hayes echoes the fundamental perspective, emphasizing that he is looking for:
(1) Real users willing to pay for the service (rather than just consuming token incentives)
(2) Profits generated by the protocol to be returned to token holders through some mechanism (such as token buybacks or profit sharing). He uses BNB as an example and harshly criticizes models like Uniswap, which generate substantial revenue but do not benefit token holders. He believes that such a model where “projects succeed, yet holders gain nothing” is outdated.
EtherFi’s DeFi Bank Blueprint and Billion Dollar Revenue Goal
Mike elaborated on EtherFi’s goal: to become the first DeFi protocol to achieve annual revenue of $1 billion (derived from real services rather than speculation). They are building a “DeFi bank” that provides one-stop financial services including payments (through a debit card in partnership with Visa/Mastercard), savings, and lending, with advantages of being on-chain, self-custodial, lower fees, higher yields, and user-friendly interfaces (hiding blockchain complexities). Its debit card product has received high praise from Hayes, who believes it addresses many pain points of high costs and poor experiences associated with previous crypto cards. EtherFi has already become profitable and has been executing token buybacks since its early days.
Positioning of Meme Coins and Asset Class Differentiation
Regarding meme coins, Arthur Hayes believes their value lies in “trading cultural hotspots” without actual cash flow backing them. Mike likened them to different “universes,” similar to roulette in a casino, with a different nature than fundamental-based investments (like poker or chess, where skill plays a higher role). He anticipates that the crypto market will gradually categorize different types of tokens (such as platform tokens, governance tokens, and meme coins) clearly in the future.
Conclusion
The dialogue between Arthur Hayes and Mike outlines a market outlook filled with opportunities but also requiring cautious responses. While macro-level liquidity expectations bring optimism, investors must break free from old frameworks to understand new policy tools (such as Treasury buybacks) and their impacts, closely monitoring key indicators like the MOVE index. Meanwhile, as the market matures, “fundamentals,” namely real users, revenue, and value return, are becoming critical for assessing project potential. Whether it is the macro narrative of Bitcoin or DeFi innovative projects like EtherFi focusing on applications, these signal possible significant developmental directions in the next stage of the crypto space. Investors should maintain flexible thinking and pay more attention to protocols that can create real value and share the results with holders.
Here is the full video:
