Arthur Hayes, the co-founder and former CEO of BitMEX, believes that the majority of people will face progressive wealth erosion due to the devaluation of money. He explained that governments will have no other option but to inflate away the public debt, resulting in the destruction of fiat wealth.
The Solution to Wealth Erosion
Hayes recommends acquiring assets outside the traditional financial system, such as cryptocurrencies. The purchasing power of crypto does not decrease compared to the cost of energy, making it an excellent option for preserving capital.
“My whole goal with all of my investing is to preserve capital so that I can consume the same amount of energy or whatever energy amount that I would like from now and into the future,” said Hayes in an exclusive interview with Cointelegraph.
The Limited Availability of Crypto Assets
However, the amount of crypto assets available is relatively small compared to the total amount of debt in the economy. This means that only a few will be able to preserve their capital while the majority sees their wealth destroyed.
The U.S. Crypto Crackdown
According to Hayes, the recent crypto crackdown in the United States reflects the government’s desire to keep people within the traditional financial system. By preventing them from fleeing to crypto, the government hopes to keep their capital in the system and reduce the debt load.
“They want your capital to sit there, and they’ll make it a very pleasant journey to lose 20, 30, 40, 50, 60% of your purchasing power over a period of time such that the debt load is effectively lowered and the finances are healthier,” he explained.
In conclusion, preserving wealth in the face of inflation is a significant concern for many individuals. Seeking assets outside the traditional financial system, such as cryptocurrencies, may be a viable solution. However, the limited availability of crypto assets means that only a few will be able to preserve their capital, while the majority will face wealth destruction.
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