BitMEX Co-Founder Arthur Hayes Says Governments Prefer Gold to Bitcoin

BitMEX co-founder Arthur Hayes says governments still prefer gold over Bitcoin because it gives them more control and stability. 

Hayes noted that Bitcoin price volatility makes it too risky for governments that need stable trade. He added that officials could lose their jobs if Bitcoin dropped by 75% thus suggesting that while regular people like him may buy Bitcoin, nations should stick to gold.

The exchange co-founder further emphasized that central banks trust gold because it has been used for trade and as a reserve for thousands of years. However, some analysts believe a change is coming, so they are advising investors to sell gold and buy Bitcoin as the difference in value between the two will eventually narrow.

Hayes Blames Tight U.S. Credit Markets for BTC’s Dip

According to Hayes, Bitcoin’s recent drop occurred because borrowing in the U.S. has become more difficult. 

He explained that the Secure Overnight Financing Rate (SOFR) recently rose above the Federal Funds rate, signaling stress in the U.S. money markets and a shortage of available cash, which contributed to the price decline.

Despite the circumstances, Hayes believes that the Federal Reserve will soon stop reducing the money supply because banks have less cash and the markets need more. Additionally, he highlights that both Bitcoin and Gold will eventually benefit from the same big trend, such as a weakening dollar and inflationary policy. 

Long-term Growth for Bitcoin

Hayes pointed out that Saudi Arabia and China recently paid for oil in Chinese Yuan instead of U.S. dollars, showing the world is slowly moving away from relying on the dollar.

He said this shift shows why both gold and Bitcoin will remain important in the global economy, with gold taking the lead, and Bitcoin following once people recognize its potential.

While Hayes remains confident that Bitcoin will grow in value over the long term as the world moves away from relying on the U.S. dollar, gold advocate Peter Schiff mocked it for rising above 100,000 and noted that the Bitcoin rally won’t last.