Arthur Hayes’ Blog: US Regulatory Pressure Intensifies, Hong Kong Welcomes Cryptocurrency – What Does This Mean?

Arthur Hayes' Blog: US Regulatory Pressure Increases, Hong Kong Embraces Cryptocurrency - What's the Significance?

This article is compiled by GaryMa from Wu Shuo Blockchain, based on Arthur Hayes’ post. The article starts with Sharpe World, discussing why the United States will spare no effort to make its citizens believe that their capital in US financial institutions is “the safest”, and then discusses the substitutability of capital. The author then introduces the budding currency war between China and Japan, and how this will transfer some Chinese capital to the cryptocurrency field through the Hong Kong financial market. Finally, the author summarizes how to strategically use the sale of junk coins as a liquidity entry point for entering high-confidence “shit projects”.

SEC’s investigation of Coinbase and Binance is just another example of the statutory financial system attempting to limit capital leaving the casino. There is a lot of debt to be repaid, and the financial system needs as much liquidity as possible to exit. I think what is happening to cryptocurrencies in the US is irrelevant because capital is substitutable.

The current market situation reminds me of the summer of 2015. The bear market began with the collapse of Mt. Gox in early 2014, causing volatility and trading volume to plummet, and the sideways price movement was painful and frustrating, with Bitcoin hovering around $200 for a long time. However, in August 2015, the People’s Bank of China suddenly sparked China’s interest in Bitcoin, causing Bitcoin to “oscillate” and depreciate against the US dollar. By November, Chinese traders had pushed Bitcoin prices up by twice. I believe similar things will happen in 2023.

Currently, the market is panicking about US retail investors possibly withdrawing from the cryptocurrency capital market. I think this concern is misplaced. In Asia, China and Japan’s silent currency war to improve their export competitiveness will drive the world’s second-largest economy to wildly issue credit, which will eventually weaken the yuan and encourage some wealthy Chinese to move their capital elsewhere. Considering the large number of wealthy people in China, various hard assets will be pushed higher when they want to “exit.”

As US regulation intensifies, companies registered in the US will stop providing or severely restrict many cryptocurrency trading services, and many financial intermediaries will indiscriminately sell junk coins. Some of these currencies are actually building AI-related technologies, and I will use the VWAP algorithm to gradually accumulate certain currencies during the summer. I am confident in the macro outlook, and things are developing as I expected, albeit slowly. Someday, the selling will stop, and a sideways market will emerge until some factor triggers cryptocurrency traders’ speculative mentality.


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