I believe that Trump and Besson are consciously trying to cause a recession or at least the appearance of a recession so that the fer Reserve becomes on their side and lowers the price of money and increases the quantity of [Music] money all right thank you for doing this I appreciate it to start with could you please tell me your name and what you do my name is Arthur Hayes and I am the CIO of melstrom my family office and we trade crypto du early stage token investing a bit of advisory all around just crypto stuff
right exactly okay we'll we'll get into melstrom in a little bit but um it would be remiss of me to not also uh talk about um your past which I I started in 2017 so I've been hearing about you using your products for a while I won't try to rehash a lot of things that you've said in other podcasts in public places but I do have a couple questions so first the the troll box for bitmex um it was such a lively place um I thought it was a a great idea to have and I
was wondering um how did that come about whose idea was it I'd love to hear the story first real tur box for crypto is BTC I don't know if you were around back then to trade on that platform I don't know that but but it was a platform um run by some Eastern European folks and it was probably one of the earliest Bitcoin exchanges and they had this troll box and there were some pretty famous personalities who existed uh in that troll box and of some you remember fontas and some other traitors and it was
like super Degen really raw funny emotional um and we thought oh well is actually people want to hang out on BTC get a chat and the trollback and shoot the it's great for creating engagement with customers and then it's also great to understand how people are actually using the platform because if someone has a problem they're going to talk about it immediately in the troll box and so we made it a core part of our platform to have uh free speech in the trollbox you say whatever you like and you know me Ben and Sam
and the early employees were in that trollbox all the time answering questions understanding what the client want so that we could build a better platform so that was s of the impetus for the the troll box that was a great idea and I I agree I was in there too uh always fun always fun in there especially during like you know Major Market moves it was just exactly uh cathartic when like when the market was going down like it has been uh for the past I don't know 12 hours or so um one more question
about about this um so bitm was founded by you and your co-founders in Hong Kong yes right and I'm I presume that was because that's where you were you were based already and that's where where your co-founders were um and it it's obviously Hong Kong is a you know a financial Hub and it was a buring crypto Hub I wonder if if uh if you were going to start like um a major crypto project today like a like an exchange or some something like that would you still think that Hong Kong is is kind of
a a central place to do it or would you be looking at other cities no I don't think Hong Kong is the same as it was back uh back in 2014 I'd say you know the probably the 1990 oh maybe even the 80s and 70s but Hong Kong is probably um the only territory in the world that really practiced free markets um sort of libertarian type government even though it was a British colony and then handed over to the Chinese and in 1997 it sort of had this long stretch of a very capitalist libertarian Place
obviously that's changed a lot now Hong Kong is 100% part of China same system all that sort of stuff and yeah what if you want to think about that whether it's good or bad but the S similar sort of substrate that allowed you know us bitfinex um every single major Chinese exchange you know FTX for good or for bad um we all started in Hong Kong for a reason gateway to China but plus sort of um Western Capital markets um and it's a very unique place and I don't think that point in time is repeated
at the current moment because the situation is different uh right now so I wouldn't start a business in right now in crypto in Hong Kong it's not what it was back in 2014 you know probably somewhere in you know probably Middle East South America somewhere like that places that really want to maybe Argentina uh places that really want to grow grow their economy obviously want to come in at a place where they're sort of at a change over in terms of their ideology and economics and that gives you that opportunity to really have the freedom
to innovate permissionless yeah that makes a lot of sense so you have a very popular blog um and I've been reading it for a long time I I enjoy it a lot immensely you you you share your thoughts primarily about uh crypto and I would say macroeconomics that that seems to be the the two kind of major topics on it could you tell me your process of how you write this uh is it is it more like it's just kind of a synthesis of of everything that you consume uh and then you you kind of
lay it out there or do you go into a into the each blog with an idea or a theme and then research it I was wondering kind of just your thought your process for writing this so I probably have like a few buckets of stuff that I talk about so on the first bucket like trading stuff so you know I had a recent call Market's like 100 110,000 Bitcoin and I said oh we're going to go to 70,000 right um and you know we're playing that out for good for bad depending on your positioning uh
as we speak and that was more of a question right I obviously trade actively or not trade actively I have portfolio I'm the CIO of melstrom I have to have a view on the markets I'm not the one signing checks and doing the deals but I you know give direction to aad who runs the investment book about how slow or hard to push you know how aggressive are we going to be what type of deals that we want to do so I need to have a macro macroeconomic View and so sometimes it'll just feel like
okay well the Market's here I see all you know the sentiment in the market about why it's at a particular level is that a disc congruous with what I've seeing in macroeconomics or some of the individuals that I read I see a dichotomy then like okay well do I believe it or not so I need to do some some research I need to have formulated an idea and that's where sort of the writing is very cathartic in in terms of answering a question okay well the market says you know bull market never go down up
only you know these macro guys are saying the liquidity is exiting exting the system which one is it I gotta have a view and so you know the the writing process is trying to argue why I believe a certain thing and back it up with evidence and logic and then put it out there for everyone to critique on on the internet and and get feedback that way so that's you know sort of one situation another would be reaction right so I don't know maybe there is a particular government policy or somebody famous in crypto says
something and I don't agree with it and you know it's getting a lot of attention and engagement so I want to come out with my own opinion and back it up with why I believe uh a certain thing and then on the other hand it's okay well I have a position that maybe people don't agree with or are not really appreciating so I need to argue why I think this particular crypto or shitcoin is going to go up in value in the future and here's my sort of worldview that leads me to that conclusion and
again the writing process is very cathartic in terms of being able to logically lay out arguments and if I can't make the make sense in writing then I shouldn't be putting my money in them in in the first place how long does it usually take to write one of these depends on the subject manner you know it might take a day it might take a week really depends right gotcha um followup question do who do you regularly read I'm curious like in macroeconomics so I outside of crypto I'm a firm believer and paying for excellent
research I don't think you get very many good things for free in this world and obviously in this saturated world of information very good curation uh is something that you pay for that's what I'm paying for very good curators of financial and political news so Felix zolof zultan puser Russell Napier Gaff call research Jim Bianco uh Danielle D Martino Booth who else um Dan Oliver yeah few few names ndr research BCA research yeah I spent a lot of money on Research gotcha gotcha gotcha great um I've noticed that over the years that you tend to
favor Pepe's uh as a cover image um what's the story on that so obviously I'm a you know I'm not a Bitcoin Maxi but obviously it's my biggest bag and I'm a firm believer in Bitcoin and you know the rare Pepe nft collection is one of the first sort of manifestations of this digital art on Chay I think they're extremely funny they're witty they're bit offensive to some people uh I own a lot of Pepe and so you know I'm just Shilling my bags and and my art through my writing all right yeah I'm a
fan okay let's uh let's move on to the present right so you are the CIO as you stated earlier of malstrom fund um can you please tell me a little bit more about the fund uh you briefly covered the areas uh that the that the fund is active in I would love a little more color on that so I obviously love Trading I love you know markets and so as you know when I step down from from bitmax and you know think about what I want to do you know I want to do something pretty
chill I'm not trying to manage other people's money I have a stack and then the question is okay employing a few talented individuals can us as a team outperform Bitcoin to a large extent and you know to smaller extent ethereum you know I'm sure the Solano people will say well you should get Barcelona but whatever uh and so okay we're we're going to go through this investment process we're going to talk to people we're going to make investments but at the end of the day is that better or worse than just you know huddling Bitcoin
so that's sort of the thesis behind Maelstrom and that's sort of the task that I've given to the team is like you know we're what's the point of us even doing this job if we can't beat the returns of Bitcoin and you know what do we do we do early stage investing so you know we do small token deals in the you know 50 $100,000 uh check range that's sort of one bucket and we've had some standout success projects like um ethery and Pendle and some other things and um yeah well you think we didn't
invest we're an adviser we also have an advisory portion where for primarily oad and's team and myself we advise projects on token on the markets on how we think that they should develop their particular application we're paid in you know advisory tokens for that role obviously our most successful project is Athena and then on the liquid side obviously we have a stash of of money and we take positions at our own risk in particular shitcoins and you know try out time the market we have a view on a particular project or types of projects based
on our research and we're going to bet our own capital and see how we do in the market so those S of the three um buckets that melstrom operates in and are you personally Pro focused on one of those buckets more than others I probably spend more time on the um liquid portion than the others I'm not the person going to conferences and meeting projects and getting in the Weeds on exactly what they're doing you know at a high level say Okay I want you guys to put on more risk or I want you guys
to take less risk uh I'm more focused on okay if I'm going to take a big position in a particular coin what's my entry price what's my exit price uh those sorts of things and then just concentrating on having a view on the macro like we don't want to be telling teams to do tge if we think that the quid is going to wash out of the market and it doesn't matter how good your project is if Bitcoin at 70,000 I'm sorry I really don't care what you're doing just hold on chill out for a
bit the market will recover and then we can advise okay everyone should go now that sort of thing so we want to have sort of an actual view to give value to uh the project that we invest in and and that we advise versus oh yeah just go pay some centralized exchange a bunch of money list your token and watch for gy 95% in the next six months like that's not what we want to do for our projects right yeah so uh on the on the liquid side you you T you do trading you mentioned
that you might trade on like um maybe some illiquid coins like shitcoins how how IL liquid are we talking about here like how shitty are the coins I mean I'll trade a I'll trade a $5 million market cap coin but I'll size my position accordingly right so okay I think it could go up a THX but if I if it goes down 75% I don't really care that that sort of thing versus like a much more liquid larger market cap point I'll take a bigger position because they don't expect to make as much money in
percentage terms but in actual you know dollars I'll make more money because I've just taken a massive much bigger position but I don't expect it to go down 75% in a day that's sort of thing so it's always sizing accordingly I like to think about it this way whenever the market goes up I want to wish I bought more and whenever the market goes down I want to be thankful that I didn't buy buy buy more so then I know I'm in a perfect sweet spot of size yeah yeah that's great you've obviously like like
Mom has has done well um with some of the Investments you've made as you mentioned earlier ethery uh and Pendle um looking forward are there any kind of like sectors of crypto uh probably new sectors of crypto or narratives that you think are going to perform well in the I don't know one one to twoe time Horizon I don't know right right now I think you know I had a conversation with oad a few weeks ago and we're like okay what are we excited about and not really anything right now uh it's right now we're
just focusing on the portfolio companies that we have trying to provide value um where we can looking for opportunities deploy our liquid capital and things that we understand well but I have to say like new projects or verticals that are going to be coming online in the next 12 to 48 months like I have no idea uh it'll you know it'll be apparent what is going to be popping maybe later in this cycle or the next cycle when that happens but I would say that stuff's still too expensive I think we're going to start seeing
some religion coming to projects that okay well there is this in liquidity around for you to list a five billion market cap token and expected to double right okay it'll go down 95% because there's just no one there to buy it so maybe you should just your expectations and you know the size of your offering and the price I don't think we're there yet I think we need to see a few more you know projects like be chain and monad and some of these massive projects just like completely obliterated in the markets not because it's
a bad project just because it's too expensive and so once we get back to hey let me launch a 10 million market cap fdv coin and let me have some real users and give some Revenue back to clients and then watch this thing go up a THX yeah when I see more stuff like that then I'm like okay cool I think the founders have gotten the message that the 2017 to 20 24 VC private Market sort of you know term sheet Market has changed and we're going to go back to more like a 2013 to
2017 Ico type situation both have pluses and minuses but I just think that Founders going to get a little bit more religion in terms of the price and then investors like us will be a little more excited about the project I don't care how good your project is if it's too expensive it's too expensive and so we're very focused on the price that we pay and the value that we get versus a lot of VC funds with LP Capital it's a bit different because they need to invest otherwise they can't get the next fund they
can't show returns to their investors I'm the only one that matters in this decision-making process and hey if there's if the Market's not giving us opportunities everybody go to the beach go to the ski mountain I don't give a I'll still pay your salaries right we only need we only need one Athena and that makes our that makes you know that might make the next five years for for the fun so it's not you know don't work stupid and lose my money work smart take a vacation I don't care gotcha yeah yeah I mean I
was going to ask you about um uh bear chain specifically but you gave that answer I thought it was telling I think it was last week um there was a there was a tweet where they they bear chain whatever uh developers basically kind of said yeah we we've messed up the um the tge and we're trying to we're trying to make it better now um can you point to any I I mean can you point to any projects that launched in 2024 that you think did this well other than hype I mean I think hype
is kind of like the the poster child for like a good launch that that got retail excited have have you I can't think of any others off the top of my head I I was we had a portfolio company Aly Labs it's still quite small market cap they launched on index first um you know it did quite well in the runup in terms of price performance I think it Forex over from the TGA to the high before it went down well with everything else in this in this market route but yeah I think it's we
see with thers they still have this mindset oh my God I need to have the binance or the OK or the H or whatever you know listing and I'm going to just do whatever they tell me to do I'm going to pay them a bunch of money and if they say go next Tuesday I'm going next Tuesday irrespective of whether that makes sense for me my project or not again we just I guess we just need to see more bear chains you know more of the most hyped project getting completely slaughtered in the markets for
Founders to realize it's not your tokens are relevant like you can't sell it the investors can't sell it so why are we playing this game that we need to have these really highly ated prices that only go down after they list and then the retail person looked at that chart like why would I buy that irrespective of whether your project is good or not they look at a you know destruction in that chart and like I don't want to own this thing let me go buy Ripple and cardano pieces of but at least theyve gone
up over time very very true okay um I wanna I want to talk about so so one more question you mentioned earlier that um you don't go to conferences um um I was wondering if if that if that means you think conferences aren't worth going to really or is there is is it is it um is there value in going to conferences in your mind no I I I go to a few conferences right obviously I speak at um too 2049 career blockchain week some other of the bigger conferences so in from my perspective our
clients are we need to have good relationship with other VC funds we need have good relationship with new and upcoming projects very very small set of people and I want to understand what other investors think I mean I'm not the one going to all the panels and all that kind of stuff so that's the the youngs who are going around and and meeting people and saying okay here's what I feel about the markets um here's the sentiment here's the vibe that's what I'm you know that's what they're going there for I think a lot of
people and I love the party but I'm already rich so it it doesn't matter we'll throw a party I'll have a good time but if you're like I was going to ask about that if you're going to build if you're building a project like when I was back in in the bitmex days like unless the conference was in Hong Kong are pretty close I didn't really go to that many conferences I figured out really quickly it's a completely waste of your time and your money because you have other things to do create user value create
product Market fit is not found at a conference and I don't know you know you know me and my Founders we did the was at the web Summit we paid $10,000 I don't know how much it was completely waste of money for some blue to sit there and like talk about Bitcoin in 2020 2014 when nobody wanted to hear that um waste of our time waste our money we should have just you know got a hotel room and did some more work um yeah go party at the conference when you've C when you're crushing it
and you know you got billions of dollars of Revenue or you know millions of ma like yeah party like a rockar but like oh no I need to go to the conference and meet people for what your thing isn't launched why are you at the conference so I think most people you understand what they're going there for don't use me as example because yeah we're a meture Capital fund with one client me and I want to go have a party so I'm gonna have a party yeah I was going to say though uh your your
parties are are fairly um well known at conferences and so um is do you do you do that just because as you say you love to party or is it also like a kind of a I don't know a way of advertising marketing thing absolutely it's it's marketing it's advertising it helps us condense meetings right so like you know you go to our conference you know pick a city there's traffic going this way and that way well obvious have a big party and if you want to come talk to us come a bit early before
we all get up and let's have a chat uh and we get way more value and we condense so many more meetings into this one particular Avenue and he'll talk about it right because at the end of the day this is an engagement game this is a marketing game especially for a F I want to tell you what I'm doing and maybe you're going to believe in it or not but at least you're going to think about it you're going to talk about the projects for good or for bad that's what we're there for it's
a completely different business model than sort of a project who has a thing that they're selling or service they're selling are you really going to sell that service and somebody's up at the club I don't think so so again don't use me as examples of why you need to go to a conference so if you want to come to my party please come to my party it's going to be lit but I'm not really sure that if the whole management team is out there getting you know drunk that's really the most effective use of your
time gotcha gota yeah I always joke with um some of my co-workers when we're uh covering conferences and I see some elaborate Booth from a company that I've never heard of before and I'm thinking to myself like I just don't think this is a good use of their money at this point but yeah all right um two more questions the the the second to last question is uh about just macro in general where do you think we are in the cycle um obviously today lot of lot of fear on the timeline U markets aren't doing
well um so again just where do you think we are are we still in a a bull bull cycle um are we near the end I absolutely still believe we're in a bull cycle obviously the bull cycle has been a lot more concentrated in Bitcoin versus a lot of the other altcoins sphere and at the end of the day right now we are experiencing a lull in liquidity Fiat money generation in the United States obviously I believe that Trump and Besson are consciously trying to cause a recession or at least the appearance of a recession
so that the Federal Reserve becomes on their side and lowers the price of money and increases the quantity of money and also if you think about it right regardless of whether you think you know the political side of things if there's a lot of fraudulent payments within the system and you want to get rid of those before you move higher can clean out the dead weight and obviously that's going to have an economic impact they're okay with it because they're doing it in the beginning of their Administration versus you know in 2026 before the elections
oh no let's go reform the entire government you know the population the voting population is going to be very skeptical of that and say oh that's Trump's fault that's vess's fault that's 's fault versus there's probably a way that they can spin this is this is Biden's fault this is the democrat's Fault again whether that you believe that doesn't really matter but the markets cleaning out the Deadwood and then they're going to reflate and they're going to print more money than probably anyone's everever printed before you move over to the EU right I don't know
if the greens are going to come on side with um the the ruling parties in Germany to do this you know constitutional to allow them to print as much money as possible to build weapons rebuild their army but if they don't do it this way they'll do it another way the sentiment is there Europe wants to rearm essentially to fight Russia but you know they just want to spend more money at the end of the day and so if it doesn't happen now it'll happen later they want to reflate it might not happen in the
next week to save your leverage long position and whatever you own but that's coming at least within the next two to three years China is just waiting they're going to have some sort of agreement with the US and the rest of the world on how they want to reshape the global economy could be good or could be bad I don't know what it is but once that agreement or you know you we're just going to go our seate ways whatever that is they're going to reflate as well so they're waiting in the sidelines and then
you have Japan where the boj is trying to is trying to raise rates we'll see if they get there or not but at the end of the day they're not trying to add more liquidity into the system so you have the ma the four major blocks either you know trying a bit of austerity to clean out the dead wood or in the process of refling their economies and we're in this period where we expected all this you know policy goodness and you know Trump's GNA do this and do that you might ended up doing these
things but at the end of the day it was liquidity negative and so now we're seeing the markets finally react to that I think in the you know third fourth quarter of this year you know through 2028 we're GNA have a massive money printing situation right America First my nation first is inflationary I need to rebuild every single part of my supply chain within my country to give jobs to people because they're losing them to Robotics and Ai and to have resiliency in in my defense space that's massively inflationary there's not enough private Capital to
fund it they're going to print the money and then you have essentially declining population and this sort of Robotics AI thing how that plays out I don't know but politicians need votes and so they're going to print money to make sure that people feel okay well the the economics system maybe whatever humanity is in of itself changes as well again massively amounts of money printed and then you have to service all the debt that they took off from Co until the present you know the US pretty much doubled the debt in existence and every other
country printed money as well so again this is is a short-term pain we're clearing out the dead wood we had a great run from 20,000 to 110 uh on bitcoin essentially you know FTX lows until you know trumpcoin and now we having a 30% correction it's pretty normal for a build market so I think yes people might have had a little little bit too much leverage maybe they bought too many shitcoins but I think we're going to clear all that clear out all that dead wood and I still believe that we could be 250,000 Bitcoin
by the end of the year does that mean that the particular shitcoin you own is going to be 100x higher I probably not because people get a little bit more Discerning in the type of things that they own but at least from Bitcoin perspective and the Glo you know overall market capitalization crypto I think we're going to be much higher um by the end of the year than we are today right yeah so um what so let me let me guess the first signs that You' be looking for would would the first signs of this
be um actual money printing like like um if if uh if the US government starts to do QE again um starts bu First's going to happen is you know let's say we go to 70,000 or whatever it is um we need to see S&P at like below 4,000 um 20 30% correction in the NASDAQ something like that uh because at the end of the US government needs the stock market to go up to make their finances that's what the the game is about and so we're not going to see anyone fail or any Financial stress
until that sort of that shakes out and there's could probably probably be some bond market things and some currency things something's going to happen I don't know where it's going to happen you know we didn't could you have predicted that silic Valley Bank and Signature Bank and you know they were going to go bust within two weeks of each other probably not was wasn't what you were thinking was going to be the the cause of you know the bank term funding program and you know $4 trillion dollar of spending that pumps Bitcoin um up 5x
um from that point I don't know what the thing is going to be but I tell you what S&P down 30% you know the tenure could go to 2% or could go to 5 percent which one of those moves somebody's going bankrupt and the fed's gonna cut in systemic collapse Sunday night oh my God and it might not and maybe it won't be straight up QE maybe it's first it's oh we're gonna end qt or we're gonna give the supplemental leverage ratio or you know there's some Arcane thing of the Federal Reserve Act that allows
them to print some money and give it to somebody and then okay then it's go time and then I know okay there's a religion then I know China's going to come next okay PBC let's go um uh then Europe's going to go okay we're going to print some bonds so that we can go fight Russia and lose okay boom there you go and then it's time to go and then so you know I think Bitcoin is going to bottom before equities and then if equities are really stressing or the bond markets stressing Bitcoin is going
to start off performing because it's going to say okay now we know we know the response when there's financial distress they always print money it doesn't matter what the political leanings Left Right Center print money that is this is the system that we're in you know we need the stress we know what the response is survive the stress profit from the response and so that's our goal as crypto investors so it sounds like the signs will be very overt and um it'll be it almost sounds like you're you're suggesting that there's a a high likelihood
of like a vshape recovery like it'll go down and then the response will come out I mean is that going to go we're going to go to 70,000 all of a sudden there's a Sunday night emergency fed meeting and you're back at 110 on Monday no like you're going to know like you know when the the B term funding program happened on a Sunday night in treasury andr came out and said okay we're creating this new program right you know Bitcoin rallied at two or 3% but it went up 5x over the next you know
year and a bit so like you have time there's no reason to try to catch a knife okay I didn't get the I didn't get the super liquidation wick on my particular asset crypto asset of choice don't try to hit that wait for them to tell you when it's time to buy and they'll tell you exactly when it's time to buy you might miss out on the first 10% or 15% but you'll get the next 5x without losing 50% of your stack trying to figure out when they're going to start Ping the money they're going
to tell you in the crypto money and then you know what to do very good all right thank you so I want to end on something um a little fun for me I know that you enjoy uh skiing I believe it's skiing not snowboarding correct skiing yes yeah why is that by the way why why skiing over snowboarding I mean my parents said to me skiing at three I love skiing um I'm good at it I think it's a little bit more forgiving on the body than being you know your feet strapped to a board
and your body turned sideways so I know I'm a bit and all right cool I like traversing that country and you know I can get into it yeah okay all right oh no I'm a snowboarder okay so I know you like I know you like skiing and I know you like skiing in Japan right I I I think that you you go to Hokkaido um it looks like you do some pretty extreme stuff up there like hellis skiing looks like yeah I do H in other places but mostly tour I hike up the mountain and
ski down in the back country okay so I have I live in Japan and um a lot of my friends are are huge uh skiers snowboarders and they do a lot of crazy stuff and and they they have some wild stories of like near misses and and I don't know just gnarly stuff and I was wondering if if you could share with me any any kind of uh Scrappy situation you've gotten into um you know my guide is very good so we haven't gotten into anything crazy yet but I think last season I was out
uh and you and I I don't know if you've been to the cat skiing operation out there in Hokkaido and one of the back bowls you know it's a very big bowl you know everybody does does their wrong thing and I'm you know coming to the the ski out to where the the cat is I don't know I was a little bit absent minded think about something else and all of a sudden this like massive crap appears in the in the snow and luckily I had enough speed and like Split Second I just jumped and
then almost like did a long jump to the other the other bank and made it without falling in the crack and breaking my leg that's probably the Diest thing that I've been in uh in recent memory good Lord did it make a sound the crack like when it formed no no it just there I couldn't see it pretty so you're see and then all of a sudden oh it looks like a crack and then you just just go as fast as you can and jump I see I see I see yeah yeah yeah no I
don't do anything wild like that I'm I'm pretty uh uh risk averse for snowboarding or or you know snow sports but I do really enjoy it um anyway thank you so much Arthur Hayes I appreciate it um I have been a longtime fan it's pretty wild to be able to talk to you actually um so I I really appreciate it man thanks for having me [Music] [Music]
