Arthur Hayes Advocates Bitcoin, Gold, and Tech Stocks as a Hedge Against Negative Real Rates

By 0xGorki 10/27/23 8:48 AM

Former BitMex CEO Arthur Hayes has once again made headlines by emphasizing the pivotal role of Bitcoin (BTC) in the current global financial landscape, particularly in the face of mounting economic challenges. Hayes, well-known for his insightful perspectives on digital currencies, recently took to social media to highlight a critical concern—negative real interest rates in the United States.

Hayes, who previously led BitMex, one of the world’s largest cryptocurrency exchanges, brought attention to this concerning financial phenomenon through a tweet. In his post, he employed a simple but powerful calculation to make his point. Hayes subtracted the third-quarter nominal GDP growth rate of 6.3% from the one-year Treasury yield of 5.4%, arriving at a real rate of -1.1%. This negative real interest rate indicates that, after adjusting for inflation, investors are effectively losing purchasing power by holding their money in U.S. Treasury bonds.

US real rates are actually negative.

3Q23 nominal GDP = 6.3%
1-year treasury yield = 5.4%

-1.1% real rate

If you have a choice why let the govt make a profit at your expense, better to own tech stocks, gold, $BTC and retain purchasing power.

The Lord is my shepherd ….

— Arthur Hayes (@CryptoHayes) October 26, 2023

In his tweet, Hayes urged individuals to carefully consider their financial choices, highlighting the risks associated with allowing the government to profit at their expense due to negative real rates. Instead, he recommended a diversified approach to safeguard and enhance one’s purchasing power. Hayes advocated for investments in technology stocks, gold, and Bitcoin, citing these assets as more suitable options in the current financial climate.

This is not the first time Arthur Hayes has shared his views on Bitcoin’s significance in today’s economic landscape. The former BitMex CEO has previously explored this topic in his essays, where he championed the idea of Bitcoin as a hedge against economic instability. However, it’s worth noting that there was a minor error in the formula Hayes used in his recent tweet. The correct method to calculate the real interest rate is by subtracting the inflation rate from the nominal interest rate, not the GDP growth rate, as mentioned in his tweet.

Hayes’ advocacy for Bitcoin as a means of preserving and growing one’s wealth in a financially uncertain world reflects a growing sentiment among investors and economic experts. As the global financial landscape continues to face numerous challenges and uncertainties, individuals are increasingly looking for alternative assets like cryptocurrencies and precious metals as a way to hedge against inflation and negative real interest rates.

In conclusion, Arthur Hayes’ recent tweet has drawn attention to the negative real interest rates in the United States and the potential implications for investors. While the formula used in his calculation may have been slightly off, his core message of considering alternative investment options, including Bitcoin, remains pertinent in an environment of economic uncertainty.

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