Original author: Anthony Pompliano

Original translation: Baihua Blockchain

What makes Bitcoin truly valuable? Arthur Hayes provided a soul-stirring answer: without retail users, Bitcoin is worthless.

In this rare in-depth conversation, Arthur Hayes, Chief Investment Officer of Maelstrom and former BitMEX founder, analyzed the current complex macro situation with his usual sharp and profound perspective. From the truth behind oil prices during 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 detector," he offered distinct judgments.

Even more surprising, Hayes boldly stated: insider trading should be legalized because what the market needs most is authentic information; over 90% of his assets are still in Bitcoin, yet he has high hopes for Hyperliquid and Zcash; he bluntly criticized various regulatory proposals, insisting that Bitcoin's value has never depended on Wall Street, but rather on the genuine needs of ordinary people around the world.

This is not just a collision between macro and crypto, but a profound reflection on free markets, information transparency, and the future financial order.

Want to know what assets are truly worthy of holding in the tumultuous year of 2026? Want to hear how an experienced trader views war, AI, privacy, and power? Keep reading; this might be the most politically incorrect yet thought-provoking conversation you hear this year.

1. The Iran War and Oil Prices: The Only Important Indicator

Host: If Bitcoin lacks retail attributes, it is worthless. I think this is where many people misunderstand, so I say: veto all these proposals. 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 an exciting conversation. He is the Chief Investment Officer of Maelstrom. In this dialogue, he will explain the current macro environment and how the Iran War could impact inflation, deflation, gold, Bitcoin, and other traditional market assets. Then we will deeply explore some crypto projects he is currently very excited about: Hyperliquid, Zcash, and prediction markets. Finally, Arthur tells us he believes insider trading should be legalized, and his explanation will open your eyes and really make you think 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. Clearly, the situation has been changing repeatedly: will there be war or not, ceasefire or not. Oil prices have surged, and everyone is panicking. What do you think about what is actually happening? Should investors be worried?

Arthur Hayes: Essentially, I made a chart on Bloomberg showing the spread between the first and sixth contracts of WTI crude oil futures. I want to track the price difference between these two contracts. Obviously, until February 28, just before the war started, they were basically in sync. The front-month contract surged significantly because of supply disruptions and closures; many carriers couldn't pass through the Straits, and spot oil prices became very expensive. However, while the forward contracts also rose a bit, the increase wasn’t as much because the market assumes that some compromise will be reached in the short to medium term and that oil will continue to flow through the Straits. So the forward oil prices aren’t as high as the front-month prices. That's the spread I have been tracking.

The only thing that matters is whether oil is flowing through this Strait. Unfortunately, many people are dying in the Middle East, but for most people, they don’t live there, and they don’t have family there. As long as gas prices are not too high, they don’t care what happens in the Middle East. For most people in the world, the only thing that matters is: Can I fly normally? Is food cheap? Can I live like I did before the conflict started?

If oil is flowing, even if people across the Middle East are suffering, it won’t affect the larger picture. But if oil isn’t flowing, we’re in big trouble. So I only look at one chart to assess the Iran War: the spread between these two contracts. If forward oil prices start to rise continuously, we know oil is not flowing through the Straits at any cost. If you can do that and the forward oil prices remain controllable, then we’re fine. If that doesn’t happen, we’ll face bigger problems.

That’s how I view the Iran War. The ceasefire might work, or it might not. But if the relevant parties believe that the current situation is stable enough to keep oil flowing, and the Trump administration does not have to take extreme measures, then conflicts in the Middle East may continue, but it won’t be crucial for most people in the world. So that’s how I look at the Iran situation: by looking at oil price charts and that spread.

Host: Do you pay attention to what people are saying? Like if the Strait is closed, but it seems the transponders are turned off, causing price fluctuations. Do you just look at prices? Prices are the real truth, and all narratives, whether something is closed or not, live photos, and all this craziness, are basically entertaining, right?

Host: But in the end, is price not the true narrator of whether the Strait is open?

Arthur Hayes: It’s price because everything else is propaganda, anecdote, or unverifiable. I read an article related to this, and it was well written, with everything having nuances. There are no absolutes, no black and white, nothing is completely open or completely closed, it all depends on the situation. And "depends on" is very difficult for investors to grapple with. So we are always looking for an objective metric that can price this uncertainty, which is the spread between the front-month and forward oil price contracts.

If oil is flowing, then news and commentary can cause oil prices to fluctuate. But is oil actually passing through? Can I sign contracts and receive oil, aviation fuel, or fertilizers in a few months? If all that continues, maybe some extra fees need to be paid, but the world can still keep functioning, inflation will increase slightly, but overall it is manageable.

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

Host: Before all this erupted, I viewed the world as having deflationary forces: eviction, tariffs, and AI and robots are consuming the U.S. economy. You started to see some prices decline in indicators. People began to think that the risk of deflation might be greater than that of inflation. Suddenly oil prices surged, and everyone turned to worry that super high inflation was coming back. How do you view the battle between inflation and deflation? Do you care what the actual answer is?

Arthur Hayes: Inflation is the inflation of what you need, and deflation is the deflation of what you want, right? If we talk about AI, the replacement of knowledge workers is accelerating. It is happening. Companies are laying off everywhere because using AI agents to perform specific knowledge work is much easier than hiring humans, and this trend will only strengthen and accelerate. This leads to deflation in the "wants" we have. You want new items, bags, cars, or luxury homes on social media, but you don’t actually need them; you just want them. Now you may have lost your high-paying tech job and it's hard to return to previous consumption levels in the short term. So the "needs" that the affected people are pushing for are actually deflationary, and the credit behind it is a problem for the banking system, and that problem will only worsen.

But what confuses central banks is that there is inflation in what we still need. The whole world economy is essentially a derivative of energy; if energy is blocked from flowing through the Strait, whether it’s fertilizers for producing food or raw material oil, there will be inflation that affects the entire economy. As a central bank, you face a dilemma: should I lower interest rates or raise them? So parts of the economy exist with both inflation and deflation at the same time.

Host: What about Kevin Warsh when he enters the Federal Reserve? Do you think he will take a specific stance, or will he just look at the data rationally? Many analysts carefully analyze the speeches of Federal Reserve officials.

Arthur Hayes: I don’t think it matters. Ultimately, the Federal Reserve is an arm of the U.S. government, and they will do what the U.S. government needs them to do so that the government can pay its bills. If there’s a deflationary time bomb driven by AI, and they need to print money to save the banking system, they will do that, and then economists will provide the reasoning. If Trump decides to take a strong stance that requires a large budget, the Federal Reserve will also cooperate by lowering rates and providing liquidity. Who sits in that position isn’t essential. They will do what needs to be done to ensure the government can afford expenses. As a leveraged investor, your timing might not come immediately, but in the long term, the Federal Reserve will always support in ways the government needs.

3. Gold, Bitcoin, and Non-Sovereign Assets

Host: Let’s talk about gold. Gold has been performing well lately, and many central banks are buying it. But now Iran reportedly wants to charge for passage through the Strait; they don't want gold but Bitcoin. So it seems that non-sovereign neutral assets have various use cases. Depending on whether the use is defensive or for payment, gold and Bitcoin seem interchangeable now. In the past 18 months, this use case for non-sovereign assets has become very prominent. Do you agree?

Arthur Hayes: Absolutely agree. In recent months, the largest export from the U.S. has been non-monetary gold. All the talk about re-industrialization and increasing exports has not been confirmed by the data. The data shows that the U.S. is exporting gold to Switzerland, refined, and then sent to China. This indicates the quiet establishment of a new standard for gold. You need to buy goods from China but have no trade surplus; how do you obtain renminbi? They are willing to accept gold. Thus, gold becomes a sovereign layer that lubricates trade. It’s not an official gold standard, but it is slowly happening beneath the surface. Whether they are actually collecting Bitcoin or just making a statement will need actual transaction records to confirm.

Host: What’s your view on how since the war started, stocks, gold, bonds, and others have dropped, while Bitcoin has remained basically steady or even slightly increased?

Arthur Hayes: Bitcoin has dropped about 50% from historical highs. From the start of the war until now, it has outperformed other assets relatively, but for most holders, the consolation is limited. Oil prices surged significantly, and it would be better if Bitcoin could keep up with hydrocarbon prices, but at least in relation to oil prices, it has performed better than major asset classes.

Host: Why do you think Bitcoin has not outperformed gold or stocks in the past few years?

Arthur Hayes: I believe the deflationary effects brought about by AI have given Bitcoin its role as a liquidity smoke detector, alerting us to existing problems. The amount of money printing is not sufficient; AI and data centers consume a vast amount of capital, and global central banks and banks have not created enough credit. Thus, as the most credit-sensitive asset, Bitcoin has seen a decline. Elon Musk mentioned that AI is so deflationary that people might demand the government print more money. Bitcoin started to decline significantly from the third quarter of last year, perhaps because it anticipated a deflationary period rather than the expected inflation. So Bitcoin might need to wait until deflationary pressures ease significantly before it can rise notably.

Even if the Iran War ends today, Bitcoin won’t just return to $100,000 because of peace. I believe the impact of AI on the value of human labor is a very significant issue, especially in a flexible economy like the U.S. Many companies are laying off because the productivity of AI teams is far greater than that of regular employees. While this improves corporate efficiency, it will have substantial effects on economies that rely on consumer spending.

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

Arthur Hayes: Over 90% of my net worth is in Bitcoin. My approach is to do nothing. It doesn’t matter whether it goes up or down; my cost basis is very low. But the issue is: should I put more fiat into it or sell some Bitcoin to buy other assets that might rise faster? Among altcoins, I am most optimistic about Zcash and Hyperliquid. But if you ask me today whether I would buy Bitcoin with new fiat, I would say no, because we are still waiting for a significant money printing event. Central banks need to realize that AI might put pressure on the banking system. Currently, they believe AI enhances productivity, so no additional actions are needed, and until the worldview changes, Bitcoin’s price reflects the lack of credit.

Host: Have you sold Bitcoin to buy other things, or do you just not invest new dollars?

Arthur Hayes: I have sold Bitcoin to buy Zcash and Hyperliquid, but not to convert back to fiat. If there is extra fiat entering the portfolio, it is placed where it can earn treasury returns.

Host: What about outside of crypto? Do you have other assets?

Arthur Hayes: Not crypto, but gold. I hold physical gold and gold mining stocks. This basically constitutes my whole investment portfolio—crypto and gold, that’s it. It’s that simple for Maelstrom.

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

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

Arthur Hayes: The biggest challengers are Hyperliquid and its DEX model, which pose existential risks to Coinbase and BN. Since the invention of perpetual contracts, we have been trying to achieve permissionless listing, and Hyperliquid has finally executed it well. The reason I like it is that it offers 24/7 leveraged trading to global users, finding product-market fit. It is taking over part of the price discovery of assets, especially those that cannot be traded through traditional channels. Now, anyone with stablecoins or Bitcoin can have leveraged exposure. That’s the game changer. Centralized trading platforms find it hard to respond quickly to the innovations of such a small team. Hyperliquid is about to launch prediction market features and significantly reduce fees, which will create an interesting competitive landscape.

I believe insider trading should be legalized across all asset classes. We want the market to reflect real information in real-time, rather than waiting for media reports. When government officials bet on prediction markets, it allows the market to know faster what they are doing. This is more valuable than propaganda.

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

Arthur Hayes: I believe so. The market should aggregate all available information. If some information can be shared at certain times and not at 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 part about government officials later, but similar behaviors already exist in most countries. Making information public can lead to better pricing and a continuous flow of information because putting money down is the best way to express real opinions.

Host: What about fragile markets like assassination markets?

Arthur Hayes: I am a believer in free markets. Let everything happen. Events like that will happen regardless. If we price it, we can know if the risk is rising, and perhaps it can even alert the authorities. These markets, apart from their negative uses, can also bring more information. What markets give us is the aggregated price of collective wisdom.

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

Host: Let’s talk about Trump’s commitment to Bitcoin and crypto. Many people are expecting strategic Bitcoin reserves and regulation, but Bitcoin’s price is basically still at the level it was when he was elected. How do you see it?

Arthur Hayes: People always say we need institutional investors, so we need these proposals. I say who cares? This is a retail-driven movement. The reason it has value is that it provides choices to those who previously had no financial services. We have created another financial system outside of the traditional banking system. If it’s just to attract large funds with a bunch of rules, it would dilute its value. Banks are interested because there are billions of ordinary people trading it. If Bitcoin loses its retail properties, it’s worthless. So I hope all those proposals are vetoed. We never needed them.

Host: What about stablecoin yields?

Arthur Hayes: I hope stablecoins can provide yields competing with banks, but the reality is political factors will hinder it. Stablecoins pose a major challenge to banks because they could lead to a loss of deposits. People are learning how politics work: stakeholders will ensure that proposals unfavorable to them are vetoed.

Host: After your past legal disputes, has your viewpoint changed?

Arthur Hayes: Not at all. My opinion has remained consistent before and after. It’s just that now I feel more deeply the banking system’s hostility towards what we have built. This is not a cute little game; it’s a competition that comes at a cost.

Host: What’s your view on Zcash?

Arthur Hayes: Bitcoin is transparent, which has its pros and cons, but it’s not completely private cash. In the age of AI and big tech, de-anonymization has become easy; if you want complete privacy, zero-knowledge proof protocols like Zcash are very valuable. The demand for privacy will likely increase over time, and Zcash's price is expected to reflect this. It won’t be fully embraced by the mainstream financial system, just as cash is no longer economic for modern banking, but it remains very important for individuals and certain scenarios.

Host: What do you feel most bearish about in the crypto space?

Arthur Hayes: I’m bearish on many Layer 2 projects that lack customers and product-market fit. Too many projects rely on unhealthy VC capital formation. We need to return to crowdfunding basics, aligning economic interests for the community, so incentives are better aligned and projects will perform more healthily.

Host: What’s the outlook for perpetual contracts on Wall Street?

Arthur Hayes: I believe similar products launched by traditional finance will fail due to clearing mechanism issues. The limited loss and socialized mechanisms of crypto allow for high leverage and 24/7 trading, which is what retail users want. Hyperliquid has the potential to become a very large trading platform because it serves billions of people globally, not just the populations of a few developed countries. Buying HYPEToken is like owning a part of the future largest trading platform, and the buyback mechanism will give it deflationary attributes.

Host: What’s the situation with your equity fund that you’re working on?

Arthur Hayes: As prices have fallen, many non-trading platform crypto companies with solid cash flows and excellent teams are undervalued. Founders want to exit, and we provide liquidity through buyouts, bringing in operators for optimization, waiting for the market to recover before exiting. This is a very attractive time.

Host: Where can people find you?

Arthur Hayes: I’m on the X platform @CryptoHayes, and I have a Substack called Crypto Hazes, where I’ll post articles.

Host: To summarize your current market perspective, you're saying there will be continued money printing in the long term. You are optimistic about Bitcoin, gold, Hyperliquid, Zcash, and undervalued crypto companies in the fundraising market.

Arthur Hayes: Yes, it’s that simple. I am not an AI stock player; I prefer to do what I am familiar with and don’t need to constantly watch the screen.

Host: Thank you for the interview; we’ll talk again soon.

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