The previous CEO of BitMEX, a cryptocurrency derivatives exchange, believes that investing in cryptocurrencies is a wise move in a “flawed banking system” as it provides protection against the risk of losing funds.
Arthur Hayes elaborated on why he believes that cryptocurrencies are an excellent substitute for traditional finance.
“Whether you’re a capitalist or a communist, everyone has amassed significant debts.
The era where this debt could be capitalized upon has ended.
Hence, if people don’t have cryptocurrencies or some form of hard assets like gold outside the traditional banking system, they will suffer losses,” argues the crypto investor.
The collapse of banking institutions, according to the former BitMEX CEO, affects politics and the economy.
However, rather than rectifying the situation, American regulators and politicians are taking actions that only increase the amount of public debt.
Hayes cited the Silicon Valley bank’s failure, which caused massive withdrawals from banks, resulting in the US Federal Reserve System’s emergency lending as an example.
The recent collapses of major banks have led people to fear that they may not have full access to their assets, particularly in institutions with significant capital.
This has increased interest in alternative finance, including Bitcoin. Consequently, the inflow of funds into the cryptocurrency market is growing, unlike significant financial institutions suffering losses, as argued by Hayes.
“For cryptocurrency to become a new financial system, people need to understand what traditional systems it can substitute or enhance.
Unfortunately, many people have no idea how money works, the banking system, or how asset markets operate,” laments the former BitMEX head.
Arthur Hayes had predicted last year that the cryptocurrency market would recover in 2023 since all those who could go bankrupt had already done so.
He had previously opposed central bank digital currencies, stating that governments could track user transactions with CBDCs.