In his recent essay, Arthur Hayes, co-founder and CIO of Maelstrom, delves into the economic imbalances plaguing America and the country’s overreliance on foreign capital. Hayes argues that implementing capital controls, rather than tariffs, is the only viable solution to rectify the situation. He predicts that these restrictions will propel Bitcoin to a staggering $1 million by 2028 in what he terms the “Boiling Frog Theory.”
Hayes begins his essay, titled “Fatty Fatty Boom Boom,” by likening America’s bloated financial system to the obesity crisis, both sustained by artificial stimulants and quick fixes that only serve to perpetuate the underlying issues. He traces the roots of America’s economic imbalances back to the establishment of the Federal Reserve in 1913 and the subsequent shift towards perpetual stimulus.
According to Hayes, tariffs are ineffective in addressing these imbalances due to loopholes and geopolitical factors. Instead, he proposes imposing a 2% annual tax on foreign ownership of US financial assets, amounting to approximately $33 trillion. Hayes suggests that this tax could eliminate income taxes for the majority of Americans, making it a politically advantageous move for the Trump administration.
In the event of foreign capital fleeing the US, Hayes predicts that the government will resort to printing more money, leading to a devaluation of US treasuries and a shift of global capital towards assets like Bitcoin. Unlike gold, which relies on intermediaries in the digital realm, Bitcoin operates independently of centralized financial systems, making it an attractive option for capital seeking refuge.
Hayes highlights the Trump administration’s alignment with Bitcoin and gold, as evidenced by the removal of tariffs on gold and the easing of crypto regulations. He envisions a scenario where foreign-held US assets worth $3.3 trillion flow into Bitcoin, triggering a supply shock and propelling its price to $1 million by 2028.
While acknowledging the potential for volatility, Hayes reveals that Maelstrom has taken a bullish stance on quality altcoins following the recent financial turmoil. He emphasizes that capital controls are no longer a fringe concept but an inevitable policy shift, with Bitcoin poised to benefit from the ensuing financial restructuring.
As BTC trades at $102,377, Hayes’s bold predictions underscore the transformative potential of capital controls and the role of Bitcoin in reshaping the global financial landscape. The essay concludes with a compelling argument for embracing Bitcoin as a hedge against the collapse of traditional financial systems.
The original article was sourced from here.