Arthur Hayes: “Russia’s USD Reserve Sanctions Will Boost Gold and Bitcoin”


Global macroeconomic conditions and geopolitical uncertainty have forced financial experts to make predictions about what comes next. BitMEX CEO Arthur Hayes recently wrote a detailed article explaining how the dynamics of global finance and monetary systems are changing.

Hayes explains the role of limited assets like Bitcoin and gold during these pivotal times. Following the Russian invasion of Ukraine, the West imposed heavy sanctions on Russia, isolating it from the global SWIFT payment and settlement system. Furthermore, isolating one of the world’s largest energy producers could have far-reaching consequences for global finance.

Hayes thus predicts the end of the SWIFT system used for economic warfare, within a century. Furthermore, he predicts that “external money” such as Bitcoin and gold will prosper. He calls it “foreign money” since they are not liabilities on any other country’s balance sheet.

Hayes believes that gold will take a dominant position in facilitating global trade in energy and food products. The BitMEX CEO adds that after the war between Russia and Ukraine, “money” will never be the same and Bitcoin is likely to benefit from this scenario.

While both Bitcoin and gold are hard money, Bitcoin is digital, physical gold is physical. If central banks start saving gold and using it in world trade, it will be difficult for them to send gold every time they make payments. This would give a gradual boost to the use of the digital currency that Hayes believes would be Bitcoin.

Countries gravitating towards Bitcoin

Hayes argues that while gold is great, storage becomes a huge problem on an individual level. Therefore, he believes that a more transportable store of wealth, Bitcoin, enters the picture.

Hayes adds that countries “that lack the capacity and access to efficiently trade and store gold will gravitate toward Bitcoin.” He cites examples of some countries like El Salvador that made Bitcoin legal tender. The CEO of BitMEX writes:

Whether you have 1 Satoshi or 1,000 Bitcoin to store, all that is required is a string of characters that make up your public and private key. That essentially weighs nothing and can be accessed from anywhere there is internet. This is the value proposition from a storage and transfer perspective of Bitcoin over gold.

El Salvador has opened the door for the adoption of Bitcoin. Many countries are currently watching to see if they are successful in this experiment. Making a bold prediction for the future, Hayes writes: “For a single Bitcoin, my unit is in the millions. For an ounce of gold, my unit is in the thousands. Remember: it is not gold or Bitcoin that is increasing in price, it is a decrease in the value of the fiat currency in which they are quoted.”

But Hayes isn’t the only one who thinks Bitcoin has an edge. Galaxy Digital founder Mike Novogratz recently said that the war will only drive cryptocurrency adoption and effectively lead to the marginalization of the USD. “This is a big problem, in many ways. This is beginning the acceleration of the de-dollarization of the world,” he added.

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