31st August 2025 > > Arthur Hayes.

tl;dr

Arthus Hayes’ latest essay has two very important conclusions, apart from his recommendations for coin picks, which is really his ultimate focus.

Market Snap 

Market Wrap

Since that all-time high of $124.5k just over two weeks ago, price action has been unconvincing at best. ETF flows have slowed with relatively frequent net outflows at times. The macro backdrop suggesting a rosy future for BTC has not changed one bit, but perhaps we have entered another period of choppy but mostly sideways movements.

Curious Cryptos’ Commentary – Just sayin’ is all

Curious Cryptos’ Commentary – Arthur Hayes

Though sometimes a little too maxi in his outlook for my liking (there will be no fiat collapse without dollar hyperinflation and there is no evidence that will ever happen), and a little too liberal in his use of offensive words in his writing and presumably in his daily speech, Arthur always has something interesting to ponder. His latest essay is a cracker:

https://cryptohayes.substack.com/p/buffalo-bill#poll-366047

Let me break it down for you, with some of my own additional thoughts and information which I believe are relevant.

We must first start, as Arthur does, with a definition of Eurodollars, with which I suspect most folks have little familiarity. It’s only been half a century or so since capital controls began to be eased in any meaningful way. Before then, the export of local currency was effectively banned. In any case, the pound, the deutschmark, the franc, had very little value except at official money changers who applied a steep discount to any trade. There was one notable exception, an exception that is still in force today, and that is of course the dollar. Wherever you go in the world, people will accept the dollar as payment. Indeed, in many places, and not just the US, it is the preferred means of payment.

After WWII cash dollars leached out of the US and into Europe. Those dollars, outside of the US banking system, and beyond the control of the US, became known as Eurodollars. That name now applies to any dollar held either as cash or in a dollar denominated bank account outside of the US anywhere in the world. It is estimated the total value is of the order of $10 - $13 TRILLION, no piffling sum.

Arthur contends that the recent passage of the GENIUS act, authorising the legitimate use of fully backed and fully regulated stablecoins, is an attempt to attract Eurodollars back into the US banking system. His argument is most persuasive.

At its core, is a simple question – do you trust your local bank to faithfully keep your dollars safe on your behalf, or is the blockchain a better solution? I think if you live in the Global South, with all its attendant corruption, there can be no doubt as to the answer. But even in Europe, we all remember that the Cypriot government took a whopping 47.5% of all bank deposits of any currency over EUR 100k. Though a lot of this was dirty Russian money, estimated at anything up to 50% of all bank deposits within Cyprus, which had previously been stolen by the Russian technocracy, this still represented theft on a grand scale by a democratically elected government. So again, the answer to the question above is obvious.

The means of distributing access to stablecoins is easy – Facebook and WhatsApp will be highly effective as the interface between users and the blockchain via wallet apps, and Zuckerberg is not going to say no to a huge new income stream. The corrupt politicians that govern the Global South, who store vast amounts of wealth offshore, are not going to stand in the way either when threatened with personal sanctions.

Arthur also suggests that retail deposits of local currency could be converted into USD stablecoins, adding another $31 TRILLION of potential cash flow.

Because of the GENIUS Act, any money that does get converted into a USD stablecoin is automatically recycled into short-term treasury bills, bringing that money into the US banking system, and usefully helping the US to finance its fiscal incontinence driven by the sheer impossibility of ever cutting government spending in any meaningful way.

In short, the US government has found a huge new buyer of its debt, a forced buyer who is price insensitive, which will drive short-term yields ever lower, bypassing the Federal Reserve. And just like that, the manipulation of short-term interest rates by the central bank is rendered impotent at a stroke, a demand the CCC has long been making. It is nice to be listened to for a change.

There is one other important aspect to all this. I have never concurred with the idea that cryptos provide a challenge to dollar hegemony. Quite the opposite in fact, as proved by this forthcoming flood of Eurodollars and other currencies into a USD stablecoin, and back into the arms of the US banking industry.

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As for his three different coin picks, well, we don’t indulge in such games here at the CCC. Just to say, he is very right about one of them. If you want to know more, the link to his essay is shown above.