Conversation with Arthur Hayes: Global Macro Landscape, AI Deflation Trap, and the Future of Crypto Assets

Original Compilation: Baihua Blockchain

What truly gives Bitcoin its value? Arthur Hayes delivers a soul-piercing answer: without retail users, Bitcoin is worthless.

In this rare, in-depth dialogue, Arthur Hayes, Chief Investment Officer of Maelstrom and former founder of BitMEX, dissects the most complex macro landscape with his signature sharp and profound perspective. From the truth behind oil prices in the Iran war to the fierce tug-of-war between AI-induced deflation and energy inflation; from gold quietly reshaping the trade system to Bitcoin’s unique role as a “liquidity smoke alarm,” he offers clear-cut judgments.

More surprisingly, Hayes boldly states: insider trading should be legalized because what the market needs most is real information; over 90% of his assets are still in Bitcoin, yet he places high hopes on Hyperliquid and Zcash; he bluntly criticizes various regulatory bills, insisting that Bitcoin’s value never relies on Wall Street but on the real needs of ordinary people worldwide.

This is not just a collision of macroeconomics and криптовалюта; it’s a profound reflection on free markets, information transparency, and the future financial order.

Want to know what assets are truly worth holding in the turbulent year of 2026? Want to hear a seasoned trader’s views on war, AI, privacy, and power? Please read on. This might be the most politically incorrect yet thought-provoking conversation you hear this year.

1. The Iran War and Oil Prices: The Only Metric That Matters

Host: If Bitcoin had no retail attributes, it would be worthless. I think that’s what many people don’t understand, so I say: veto all these bills. I hope Trump vetoes every single one. We don’t need it. We didn’t need it in 2009, we didn’t need it in 2018, and we certainly don’t need it in 2026.

Hello everyone, today we have Arthur Hayes for a fantastic conversation. He is the Chief Investment Officer of Maelstrom. In this discussion, he will explain the current macro environment, how the Iran war might impact inflation, deflation, gold, Bitcoin, and other assets in traditional markets. Then we’ll dive into some crypto projects he’s very excited about right now: Hyperliquid, Zcash, prediction markets. Finally, Arthur tells us he believes insider trading should be legalized, and his explanation will open your eyes, truly making you think more critically about what he says and his reasoning.

Below is my latest conversation with Arthur Hayes.

Host: Alright, Arthur. Let’s start with the Iran war. Obviously, the situation has been back and forth: war is on, war is off, ceasefire, no ceasefire. Oil prices spiked, everyone panicked. What’s your take on what’s actually happening? Should investors be worried?

Arthur Hayes: Basically, I made a chart on Bloomberg showing the spread between the first and sixth WTI crude oil futures contracts. I wanted to know the difference between these two contracts. Obviously, until the war started on February 28th, they were basically in sync. The front-month contract gapped up significantly because we had supply disruptions, shutdowns, many carriers couldn’t pass through the Strait, and spot oil became very expensive. But the back-month contract, while it also rose a bit, didn’t rise nearly as much because the market assumes some sort of compromise will be reached in the short to medium term, and oil will continue to flow through the Strait. So the back-month oil price isn’t as high as the front-month. That’s the spread I’ve been tracking.

The only thing that matters is whether oil flows through this Strait. Unfortunately, a lot of people are dying in the Middle East, but for most people, they don’t live there, they don’t have family there. As long as gasoline prices aren’t too high, they don’t really care what happens in the Middle East. For most of the world, the only thing that matters is: can I fly normally? Is food cheap? Can I live my life as I did before the conflict started?

If oil is flowing, even if people are suffering losses across the Middle East, it doesn’t affect the big picture. But if oil isn’t flowing, we have a big problem. So I only look at one chart to judge the Iran war, and that’s the spread between these two contracts. If the back-month oil price starts trending consistently higher, then we know oil isn’t passing through the Strait, no matter what cost it takes to get it through. If you can do that, and the back-month price stays contained, then we’re fine. If not, then we have a bigger problem.

That’s how I view the Iran war. This ceasefire, maybe it works, maybe it doesn’t. But if the relevant parties believe the current situation is sufficient to keep oil flowing, and the Trump administration doesn’t have to take extreme measures, then the conflict in the Middle East might continue, but it’s not critical for most of the world. So that’s how I look at the Iran situation: look at the oil price chart, look at that spread.

Host: Do you give weight to the things people are saying? Like the Strait is closed, but it looks like transponders are turned off, price volatility. Do you just look at the price? Is price the real truth-teller, while all the narratives, what’s closed what’s not, on-the-ground photos, and all this crazy stuff, is actually quite entertaining, right?

Host: But ultimately, isn’t price the truth-teller for whether the Strait is open?

Arthur Hayes: It’s price, because everything else is propaganda, anecdotal, or something we can’t verify. I read a relevant article, thought it was well-written, and everything is nuanced. There’s no absolute black and white, no completely open or completely closed, it all depends on the situation. And “it depends” is very difficult for investors to handle. So we always look for an objective measure that prices this uncertainty, and that’s the spread between the front-month and back-month oil futures contracts.

If oil is flowing, then news and talk can move the oil price up and down. But is oil actually passing through? Can I contract to get oil, jet fuel, or fertilizer in a few months? If all that is still happening, maybe with some extra cost, but the world can still function, inflation increases a bit, but overall it’s manageable.

2. The Tug-of-War Between Inflation and Deflation: The Conflict of AI and Energy

Host: Before all this erupted, my view of the world was that there were deflationary forces: deportations, tariffs, AI and robots are eating the US economy. You started seeing some prices drop on metrics. People started thinking deflation risk might be greater than inflation. Suddenly oil prices spike, and everyone immediately pivots to worrying about super-high inflation coming back. How do you view the contest between inflation and deflation? Do you care what the actual answer is?

Arthur Hayes: Inflation is inflation of what you need, deflation is deflation of what you want, right? If you mention this AI thing, the replacement of knowledge workers is accelerating. It’s happening. There are companies laying off everywhere because it’s much easier to use AI agents for specific knowledge work than to hire humans, and this trend will only intensify and accelerate. This causes deflation in the things we “want.” You want the new items, bags, cars, or mansions you see on social media, you don’t actually need them, you just want them. Now you might be unemployed, lost a high-paying tech job, and it’s hard to regain your previous consumption level in the short term. So those “needs” hyped by influencers are actually deflating, and the credit behind them is a problem for the banking system, a problem that will only worsen.

But what confuses central banks is that there’s inflation in the things we still need. The entire world economy is essentially a derivative of energy. If energy flow through the Strait is obstructed, whether it’s fertilizer for food production or crude oil as a raw material, there will be inflation, affecting the entire economy. As a central bank, you face a dilemma: should I cut rates or raise rates? So, different parts of the economy experience inflation and deflation simultaneously.

Host: What about when Kevin Warsh enters the Fed? Do you think he’ll take a specific stance, or just look at the data rationally? Many analysts dissect every word from Fed officials.

Arthur Hayes: I don’t think it matters. Ultimately, the Fed is an arm of the US government. They will do what the US government needs them to do so the government can pay its bills. If there’s an AI-driven deflation time bomb and they need to print money to save the banking system, they’ll do it, and economists will provide justifications. If Trump decides to take tough action requiring a huge budget, the Fed will similarly cooperate by cutting rates and providing liquidity. Who sits in that seat isn’t crucial. They’ll do what’s necessary to ensure the government can afford its spending. As a leveraged investor, your timing might not come immediately, but in the long run, the Fed will always provide support in the way the government needs.

3. Gold, Bitcoin, and Non-Sovereign Assets

Host: Let’s talk about gold. Gold has performed well recently, many central banks are buying. But now Iran is reportedly charging fees for the Strait, and they don’t want gold, they want Bitcoin. So non-sovereign neutral assets seem to have multiple use cases. Depending on whether the use is for defense or payment, gold and Bitcoin now seem interchangeable. Over the past 18 months, this use case for non-sovereign assets has been very prominent. Do you agree?

Arthur Hayes: Absolutely agree. In recent months, the number one US export by value is non-monetary gold. All the talk about re-industrialization and increasing exports isn’t borne out by the data. The data shows the US is exporting gold to Switzerland, refined, then shipped to China. This shows a new gold standard is quietly being established. You need to buy goods from China but don’t have a trade surplus, how do you get RMB? The other side is willing to accept gold. So gold becomes the sovereign layer lubricating trade. It’s not a formal gold standard, but it’s happening slowly beneath the surface. As for whether they are actually accepting Bitcoin or just making a statement, we’d need to see actual transaction records to confirm.

Host: What’s your take on the fact that since the war started, stocks, gold, bonds, etc., have all fallen, while Bitcoin is basically flat or even slightly up?

Arthur Hayes: Bitcoin is down about 50% from its all-time high. It has outperformed other assets relative to the war’s start until now, but that’s little comfort for most holders. Oil prices surged significantly. It would be better if Bitcoin could keep up with hydrocarbon prices, but at least relative to oil, it’s performing better among major asset classes.

Host: Why do you think Bitcoin hasn’t outperformed gold or stocks over the past few years?

Arthur Hayes: I believe in the deflationary effect of AI. Bitcoin is like a liquidity smoke alarm, alerting us to the problem. Not enough money is being printed. AI and data centers are consuming massive capital. Global central banks and banks aren’t creating enough credit. Therefore, as the asset most sensitive to credit, Bitcoin has fallen. Elon Musk mentioned AI is so deflationary that people might demand the government print more money. Bitcoin started falling significantly from Q3 last year, perhaps because it sensed the deflationary period coming, not the expected inflation. So Bitcoin might need to wait for deflationary pressures to ease before making a significant comeback.

Even if the Iran war ended today, Bitcoin wouldn’t return to $100,000 just because of peace. I think the impact of AI on the value of human labor is a very big problem, especially in a flexible economy like the US. Many companies are laying off because AI teams are far more productive than average employees. While this boosts corporate efficiency, it has real implications for a consumer-spending-driven economy.

Host: What’s your current Bitcoin allocation in your portfolio? How are you handling it?

Arthur Hayes: Probably over 90% of my net worth is in Bitcoin. My handling method is to do nothing. It goes up or down, doesn’t matter, my cost basis is low. But the question is: should I put in more fiat, or sell some Bitcoin to buy other assets that might rise faster? Among altcoins, I’m most bullish on Zcash and Hyperliquid. But if you ask me if I would buy Bitcoin with new fiat today, I’d say no, because we’re still waiting for a massive money-printing event. Central banks need to recognize that AI could cause banking system stress. Currently, they think AI will boost productivity, so no extra action is needed. Until that worldview changes, Bitcoin’s price is reflecting insufficient credit.

Host: Have you sold Bitcoin to buy other things, or are you just not putting in new dollars?

Arthur Hayes: I’ve sold Bitcoin to buy Zcash and Hyperliquid, but not to convert back to fiat. If extra fiat enters the portfolio, it sits somewhere earning Treasury yields.

Host: Outside of crypto? Do you have other assets?

Arthur Hayes: Not crypto, it’s gold. I hold physical gold and gold mining stocks. That’s basically my entire portfolio—crypto and gold, that’s it. For Maelstrom, it’s that simple.

4. Hyperliquid, Prediction Рынокs, and Thoughts on Insider Trading

Host: When you look at different crypto technologies and companies, many are already public, and there are new challengers, from prediction markets to Hyperliquid. How do you view their competition with big companies like Coinbase, BN?

Arthur Hayes: The biggest challenger is Hyperliquid and its DEX model, posing an existential risk to Coinbase and BN. We’ve been trying to achieve permissionless listing since the invention of perpetual contracts, and Hyperliquid finally executed it well. The reason I like it is that it provides 24/7 leveraged trading for global users, finding product-market fit. It’s taking over price discovery for some assets, especially for those who can’t trade through traditional channels. Now anyone with stablecoins or Bitcoin can get leveraged exposure to express a view. That’s the game-changer. Centralized exchanges find it hard to respond quickly to innovation from such a small team. Hyperliquid is about to launch prediction market features and significantly reduce fees, creating an interesting competitive landscape.

I think insider trading should be legalized across all asset classes. We want markets to reflect real information in real-time, not wait for media reports. Government officials betting in prediction markets would let the market know what they’re doing faster. That’s more valuable than propaganda.

Host: If someone shares information for personal gain, do we accept that trade-off? Are they providing a public service to the market?

Arthur Hayes: I think yes. Markets should aggregate all available information. If some information can be shared sometimes and not others, what’s the point of the market? Yes, there are ethical issues, but as a trader, I want complete information. We can deal with the government official part later, but similar behavior already exists in most countries. Making information public leads to better pricing and a continuous information flow because putting money on the line is the best way to express a real opinion.

Host: What about fragile markets like assassination markets?

Arthur Hayes: I’m a believer in free markets. Let it all happen. Similar events will happen anyway. We price it, we can know if risk is rising, maybe even alert authorities. Besides negative uses, these markets can bring more information. What markets give us is the wisdom of crowds aggregated into a price.

5. Bitcoin’s Retail Attributes, Privacy Coins, and Future Outlook

Host: Let’s talk about Trump’s promises on Bitcoin and crypto. Many expect a strategic Bitcoin reserve and regulation, but Bitcoin’s price is basically where it was when he was elected. What’s your take?

Arthur Hayes: People always say we need institutional investors, so we need these bills. I say who cares? This is a retail-driven movement. The reason it has value is that it provides an option for those who previously had no financial services. We’ve already created another financial system outside the traditional banking system. If we add a bunch of rules just to attract big funds, it dilutes its value. Banks are interested because billions of ordinary people are trading it. If Bitcoin loses its retail attributes, it’s worthless. So I hope those bills get vetoed. We never needed them.

Host: What about stablecoin yields?

Arthur Hayes: I wish stablecoins could offer yields to compete with banks, but the reality is politics will hinder it. Stablecoins are a major challenge for banks because they could cause deposit flight. People are learning how politics works: stakeholders will ensure bills unfavorable to them get vetoed.

Host: Has your perspective changed after your past legal issues?

Arthur Hayes: Not changed at all. Same opinion before and after. Just now I feel more acutely how hostile the banking system is to what we’re building. This isn’t a cute little game; it’s a competition with a price to pay.

Host: What’s your view on Zcash?

Arthur Hayes: Bitcoin is transparent, which has pros and cons, but it’s not completely private cash. In the age of AI and big tech, de-anonymization becomes easy. If you want complete privacy, zero-knowledge proof protocols like Zcash become valuable. The need for privacy will increase over time, and Zcash’s price should reflect that. It won’t be fully embraced by the mainstream financial system, just like cash is no longer economical for modern banks, but it’s very important for individuals and certain scenarios.

Host: What are you most bearish on in the crypto space?

Arthur Hayes: I’m bearish on many Layer 2 projects lacking customers and product-market fit. Too many projects rely on unhealthy VC capital formation. We need to return to crowdfunding basics, giving the community economic interest, so incentives are better aligned and project performance is healthier.

Host: What’s the future of perpetual contracts on Wall Street?

Arthur Hayes: I think similar products launched by traditional finance will fail due to liquidation mechanism issues. Crypto’s limited loss and socialized mechanisms allow high leverage and 24/7 trading, which is what retail users want. Hyperliquid has the potential to become a very large

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