In this episode of Bankless, Arthur Hayes returns with a thesis that cuts to the heart of both macro and crypto. According to Hayes, the U.S. is undergoing a massive monetary transformation—one that spells the end of the U.S. treasury bond as the world’s reserve asset and ushers in a new era defined by capital controls, financial repression, and—ironically—a booming crypto market.
ETH's Price Action and Macro Backdrop
We begin with a nod to Ethereum’s sudden 50% rally. Hayes chalks it up to human nature: hated assets bounce the hardest. ETH had been the punching bag of the last cycle, and its recent price action is just the beginning of a deeper trend, he believes. Despite not buying more, Hayes says he's long ETH and optimistic about its future, though the real story lies in the macro landscape.
From Bretton Woods to the Petroyuan
Hayes takes us through a fascinating post-WWII monetary history lesson—from Bretton Woods and the gold-backed dollar, to the petrodollar deal with Saudi Arabia, to what he calls the "Petro-yuan" era ushered in by China’s 1994 currency devaluation. This era saw China and other Asian countries stack treasuries in exchange for access to global commodities. The result? Deindustrialization in the U.S. and ballooning inequality at home.
The Trump Doctrine and Monetary Phase Change
According to Hayes, Donald Trump’s economic policies mark a conscious attempt to reverse this decades-long trend. His team—including advisors like J.D. Vance—believe the 1971 abandonment of the gold standard marked the start of America’s decline. The goal? Remove U.S. treasuries as the global reserve asset and replace them—eventually—with gold or even Bitcoin.
But tariffs, Hayes says, are too politically toxic. Americans can’t handle the price inflation that comes with them. Instead, the U.S. may pursue capital controls: taxing foreign ownership of U.S. assets, restricting access to real estate or equities, and ultimately reshaping the global capital flow.
Crypto as the Escape Valve
As capital flees U.S. assets or is forced out, and as the Fed inevitably returns to quantitative easing to plug the gap, crypto stands to benefit enormously. In Hayes’ words: “buy everything.” But especially Bitcoin and gold. If capital controls are imposed, foreign investors will sell treasuries, triggering more volatility and more printing—fuel for crypto assets.
Hayes believes the trade is simple: own the only assets that governments can't debase or confiscate. That means Bitcoin and gold.
A Dual Monetary Future
Could we be heading toward a world with two monetary systems? One led by the U.S. and another by China? Hayes thinks so. But in either system, the real winners will be those who opt out—who store value in neutral, censorship-resistant assets.
The Political Crypto Pivot
We also discuss the surprising pro-crypto shift in U.S. politics. Trump’s team is embracing crypto, not because of ideology, but because it’s politically useful. Hayes warns that while this may lead to more favorable regulation, it may also serve large incumbents like Coinbase and BlackRock rather than foster permissionless innovation.
Where Hayes is Placing His Bets
Arthur’s portfolio? 60% Bitcoin, 20% ETH, the rest in other crypto projects, physical gold, gold miners, and short-term T-bills. He’s not touching long-dated bonds. He’s also building a crypto-native LBO fund to scoop up cashflow-positive companies and flip them to SPACs as Wall Street warms back up to crypto.
Final Take
This episode is a masterclass in macro-financial engineering with crypto at its core. Whether you believe treasuries are toast or not, Hayes makes a compelling case: if the global monetary system is fragmenting, crypto is the fastest horse.