Arthur Hayes Says Bull Market Begins in Anxiety, Prices Rise as Money Supply Expands

Arthur Hayes, chief executive officer of Flop Labs and chief investment officer of Maelstrom, said he remains bullish on the cryptocurrency market despite concerns that artificial intelligence could threaten encryption technology.

On October 8, Hayes said markets have risen through crises before and that an expansion in money supply will push prices higher. Major bull markets, he said, begin by climbing a wall of anxiety. In other words, fears spreading through the market should not be viewed only as a factor that could undermine a bullish outlook.

He cited events that dampened investor sentiment in different periods. In 2017, he pointed to the debate over Bitcoin's block size. In 2020, he cited the spread of Covid-19. In 2023, he highlighted the fallout from the collapse of FTX and benchmark interest-rate increases by central banks around the world.

Hayes placed this year's anxiety over AI-related encryption technology in the same context. He described it as FUD, referring to fear, uncertainty and doubt spreading through the market.

"Money will be injected into the system, and the prices of the cryptocurrencies you hold will rise," Hayes said. His view is that liquidity from an expanding money supply, rather than concerns surrounding the technology, will drive the next advance.