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On March 16, Arthur Hayes, the co-founder of the cryptocurrency exchange Bitmex, published a blog post called âEnergy Cancelled,â which describes the economics behind the ongoing Russia-Ukraine war. Hayes explains in his 26-minute long opinion piece that historians may point to February 26, 2022, as the time in history when the âPetro Dollar / Euro Dollar monetary systemâ ended.
Speculation Concerning an Independent International Monetary and Financial System Free From the Petro Dollar and Euro Dollar Monetary System
Thereâs been a lot of economic calamity since the start of the Russia-Ukraine conflict, as financial conditions worldwide have tightened and Russia has been sanctioned by a large swathe of countries. Analysts and economists believe the war and sanctions could have negative effects on the global economy and on March 5, the International Monetary Fund (IMF) warned the âeconomic consequences are already very serious.â A few days after the IMF warning, U.S. lawmakers introduced a bill that sanctions Russiaâs gold reserves.
Reports indicated on March 13, that the Russian Federation finance minister, Anton Siluanov, explained that half of the countryâs gold and foreign reserves were frozen. âThis is about half of these reserves that we had. We have a total amount of reserves of about $640 bln,â Siluanov said. âCurrently, we cannot use about $300 billion of these reserves,â the Russian finance minister added.
Siluanovâs statements have led to speculation concerning an independent international monetary and financial system between the Eurasian Economic Union (EAEU) and China. Moreover, a great deal of vagueness and confusion concerning the Russianâs frozen gold. The journalist Pepe Escobar highlights in his report called âSay hello to Russian gold and Chinese petroyuan,â that there is a mystery to be solved. âWhere is that frozen Russian gold?â Escobarâs report asks.
Bitmex Co-Founder Arthur Hayes Outlines the Consequences Tied to Canceling the Worldâs Largest Energy Exporter
Meanwhile, the co-founder of the cryptocurrency exchange Bitmex, Arthur Hayes, published a blog post on March 16, that touches upon canceling the worldâs largest energy exporter and the end of the âPetro Dollar / Euro Dollar monetary systemâ
What happens when you "cancel" the world's largest energy producer ⊠? "Energy Cancelled" is an essay on why the post-1971 Petro / Eurodollar regime died on 26 February 2022. Are you ready for $1 million #Bitcoin and $10,000 #Gold?https://t.co/EttRAmPPS9 pic.twitter.com/LOSqaseq3N
â Arthur Hayes (@CryptoHayes) March 16, 2022
The blog post written by Hayes is extremely long, but comprehensive and filled with sourced data. Hayes stresses that historians will likely call February 26, 2022, as the end of the monetary system controlled by the âPetro Dollarâ and âEuro Dollar.â
Furthermore, Hayes believes a financial crisis will take place and it will stretch across every aspect of the financial system worldwide. âI am 100% certain that there will be a financial crisis of epic proportions predicated on losses faced by commodity producers and traders who touch every aspect of the globalised financial system,â the Bitmex co-founderâs blog post explains. Hayes added:
You cannot remove the worldâs largest energy producer â and the collateral these commodity resources represent â from the financial system without serious unimagined and unintended consequences.
Vulnerabilities Tethered to Centralized, Permissioned Digital Networks
The blog post written by the Bitmex co-founder details how the U.S. and the dollar became a dominant force in the world of finance. At one time America was dominant in industrial and manufacturing businesses, but Hayes says these days âAmerica exports finance, not goods, to the world on a macro scale.â
Hayes also talked about fiat currencies and how humans have devised ways to send âvalue electronically over centralised permissioned digital networks.â While the SWIFT payments network is operated by a number of countries, Hayes insists SWIFT is âeffectively controlled by the U.S. and EU.â
Hayes explains that there are vulnerabilities when a ruling nation âdecides to block access to the network to any participants.â He says that the point begs the question: âShould you âsaveâ in assets that ride on this centralised, permissioned digital monetary network?â The blog post highlights that thereâs a level of trust given that a nation state will not âexpropriate your âsavings.ââ The Bitmex founderâs blog post adds:
Remember this, you own nothing, you merely ârentâ your net worth both as an individual or sovereign from the entity that operates the centralised, permissioned fiat digital monetary network.
Hayes Believes if Gold Marches Its Way Above $10K, Bitcoin Will March Its Way to a Million
Further into the blog post, Hayes says that he believes gold will âphase shiftâ a great deal higher than the price is today. He believes competition and demand âwill push the marginal last price well north of $10,000, and we could see stupendous prices for gold that seems unfathomable.â
Gold jumping to $10K per ounce or higher will âpsychologically shockâ the worldâs asset markets, Hayes notes. Hayes wholeheartedly believes that most hard assets that people use to hedge will skyrocket in value and this includes bitcoin (BTC).
âAs gold marches its way above $10,000, bitcoin will march its way to $1,000,000. The bear market in fiat currencies will trigger the largest wealth transfer the world has ever seen,â Hayes explains. He adds that he believes both gold and bitcoin are forms of hard money assets. âBoth are hard money, one is analog (gold) one is digital (bitcoin),â Hayes writes.
Toward the end of the Bitmex executiveâs blog post, he describes the pros and cons tied to storing wealth in gold and how it can be cumbersome to store. âMost readers donât have a vault in a freeport in which to store their yellow pet rocks â Instead, you would like a more transportable hard store of wealth,â Hayes says.
Hayes finishes his blog post by repeating that âyou cannot cancel the largest energy producer from a monetary system without massive repercussions.â He deduces after the fog of war is dispersed, the economy will âpresent a situation where hard money instruments rule all of global trade.â
What do you think about the recent blog post published by the Bitmex founder Arthur Hayes? Let us know what you think about this subject in the comments section below.
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The views and opinions expressed in this article are solely those of the authors and do not reflect the views of Bitcoin Insider. Every investment and trading move involves risk - this is especially true for cryptocurrencies given their volatility. We strongly advise our readers to conduct their own research when making a decision.