Arthur Hayes predicts a historic bull run in crypto in 2025: War, debt, and inflation will drive Bitcoin to $250,000 and Ethereum to over $10,000.

Arthur Hayes, co-founder of BitMEX, points out in his latest macroeconomic paper that the global entanglement in war, debt crises, and refusal to raise taxes will trigger the largest crypto bull run in history. He predicts that by the end of 2025, Bitcoin (BTC) could reach $250,000, and Ethereum (ETH) is expected to break $10,000. The core logic is that trillion-dollar military spending and strategic investments are driving the U.S. into a "wartime credit expansion," where inflation is reignited in a negative real interest rate environment, and scarce crypto assets will become the best outlet for excess liquidity. Regulatory shifts and institutional entry will further accelerate this process, making crypto assets the perfect "social pressure valve."

War Debt Spiral: Macro Fuel for the Crypto Bull Run In an article on July 23, Hayes articulated his core argument: when the world is mired in endless wars (the Russia-Ukraine conflict, Middle Eastern turmoil), steeped in debt and refusing to raise taxes, it will lay the foundation for an epic bull run in crypto assets. He pointed out that the U.S. defense budget for 2024 has exceeded one trillion dollars, and the expanding military plans in Europe and Asia are driving the global economy into a "wartime credit expansion" cycle. This radical fiscal expansion will not be achieved through tax increases, but will rely on the support of central bank balance sheets. To maintain debt sustainability, real interest rates are forced down into negative territory, which will inevitably reignite inflation. In this environment, global scarce risk assets such as Bitcoin and Ethereum will be the biggest beneficiaries.

Inflation is not a threat, but rather a catalyst for encryption Unlike traditional beliefs, Hayes views inflation as the core driving force behind the next round of the crypto bull run. He likens the current mechanism to a new form of quantitative easing: by lifting asset prices, capital is directed towards politically supported areas. Crypto assets, due to their characteristics, have become an ideal destination for excess liquidity:

• Social Stability: Unlike the price increases in essential areas such as food and housing that can lead to social conflicts, the appreciation of Crypto Assets does not directly harm the general public, making it a perfect "social escape valve"(escape valve).
• Global Liquidity: Crypto Assets possess scarcity, global accessibility, and 24/7 trading characteristics, allowing them to efficiently attract global capital.
• Anti-Inflation Property: The unlimited expansion of fiat currency supply fundamentally opposes the fixed supply of crypto assets (with a Bitcoin cap of 21 million coins).

Regulatory Shift Resonates with Institutional Get on Board Hayes also emphasized the positive changes in the regulatory environment:

• Bipartisan Consensus: Crypto Assets have gained bipartisan political support in the United States.
• Pension get on board: Retirement funds are gradually opening the door to digital assets.
• Institutional Deepening: Traditional financial institutions are accelerating their layout in the Crypto Assets field. He predicts that if Trump wins a second term, he may further accelerate this trend through tax incentives and a clear regulatory framework.

Core Predictions and Time Frame

• Bitcoin Target: 250,000 USD (2025 end of 2025 )
• Ethereum Target: $10,000 (2025 by the end of 2025 )
• Driving Logic: Wartime credit expansion → Negative real interest rates → Inflation surge → Capital inflow into scarce assets
• Key Catalysts: Surge in global military spending, central bank debt monetization, clarification of regulatory policies

Conclusion: Arthur Hayes has constructed a grand narrative of the crypto bull run centered around "war-debt-inflation", with a target price of 250,000 Bitcoin and 10,000 Ethereum that has shocked the market. The core of this theory lies in the insight that governments inevitably transfer debt through hidden inflation, while crypto assets, due to their non-consumable nature, become the only asset class capable of absorbing vast amounts of liquidity without triggering social unrest. Investors need to pay attention to three major verification signals: 1) whether global military spending continues to exceed expectations; 2) whether central banks in Europe and the US will substantially maintain negative interest rates; 3) the regulatory policy direction after the US elections. If the macro situation develops along Hayes' preset path, the crypto market may usher in a violent bull run in 2025 that far exceeds the last cycle. However, high returns come with high risks, so it is recommended that investors retain sufficient risk exposure when planning, and be vigilant about potential short-term liquidity crises triggered by geopolitical conflicts worsening beyond expectations.