[TOKEN2049] Interview with Arthur Hayes “The altcoin season has already arrived… The problem is quality”

On April 30th, at the global blockchain event 'Token2049' in Dubai, Arthur Hayes, founder of cryptocurrency investment firm Maelstrom, emphasized that "the key liquidity driving the current market is not the Federal Reserve (Fed), but the U.S. Treasury." In an interview with TokenPost immediately after the event, Hayes analyzed that "from the end of 2022, the Treasury released approximately $2.5 trillion in liquidity previously tied up in the reverse repo market through short-term government bond issuance" and "this measure led to a simultaneous rise in risky assets such as Bitcoin, stocks, and gold." He noted that "while many are waiting for the Fed's monetary policy shift and expecting monetary easing and quantitative easing (QE), the actual liquidity provider is the Treasury" and "the government bond repurchase policy starting from April 2025 can be interpreted in the same context." Although not an official QE, the policy is likely to induce risky asset price increases by supplying additional market liquidity. Hayes pointed out that "market participants are mistaken by focusing only on when the Fed will cut rates or stop quantitative tightening (QT)" and that "in reality, liquidity is determined by how the Treasury issues and purchases bonds." He added that "while the Fed's attitude remains hawkish, the Treasury's policy is gradually moving towards a more accommodative direction." He also expressed that "there's a high possibility that April 2025 will be the bottom of this cycle, and the market should already be starting to repurchase risky assets." He explained that "since the Treasury has declared it will 'ensure the functioning of the bond market,' the market is interpreting this as a signal." Regarding the recent altcoin market's performance, he stated that "the altcoin season has already happened." He explained that "projects like Hyperliquid have risen 10-fold from $3 to $30, and many high-quality altcoins have already experienced a bull market." However, he pointed out that "many venture capital-based projects from 2023-2024 have structures with high fully diluted valuation (FDV) and low circulating supply, making it difficult to return profits to investors." He diagnosed that "such projects have no customers, no revenue, and no demand, so their prices can only decline." Looking forward, Hayes predicted that "Bitcoin dominance could rise to 70%, after which funds will move to altcoins with actual usability and revenue models." He emphasized that "while previously VC-invested formal projects were dominant, going forward, projects that actually generate revenue and distribute it to token holders will gain attention." He explained that this is not a short-term trend but a long-term value connection, indicating a fundamental-based revaluation season is approaching.