Global financial markets resemble downhill skiing; a single snowflake may trigger an avalanche.
On April 23, 2025, BitMEX founder Arthur Hayes published a lengthy article, comparing his skiing experience in Hokkaido to the financial market risks triggered by the strong tariff policies of the Trump administration. He believes that this “Tariff Ski Cut” has led to severe fluctuations in the bond market, while the emergency responses from the U.S. Treasury and the Federal Reserve have established a bullish bottom for Bitcoin. This article summarizes key insights and perspectives from his writing.
Tariff Policies as Avalanche Trigger Tests: Trump Experiments with the Global Market
In skiing terminology, a “ski cut” is a high-risk testing method aimed at assessing the stability of a snow slope, potentially leading to an avalanche. Arthur Hayes believes that the new tariff policy implemented by Trump on April 2 serves as such a test, merely shifting the testing ground from a snow slope to the global financial market. This “Tariff Liberation Day” not only shocked the market but also escalated U.S.-China tensions to new heights, resulting in a dual crash in global equities and bonds.
Bond Market Volatility: The True Source of Market Fear
Although the decline in asset prices has caused short-term panic, Hayes points out that the real source of market anxiety is the surge in U.S. bond market volatility, with the MOVE Index nearing historical limits. Such high volatility levels can not only undermine market confidence but also trigger a cascading liquidation of hedge fund margins, leading to a liquidity crisis.
Policy Reversal: The Treasury and Federal Reserve’s Covert QE
In just one week, the market experienced a dramatic turnaround. Trump urgently eased tariff measures, applying them only to China; simultaneously, the Boston Federal Reserve Bank President delivered remarks aimed at stabilizing the market. However, the real key came from U.S. Treasury Secretary Scott Bessent, who announced a large-scale bond repurchase program, leading the market to perceive this as the beginning of a new round of disguised easing. Hayes believes these actions signify a shift in policy attitude from “all is well” to “we’re in trouble, we need to act.”
Bond Repurchases: Fueling the Leverage Station
The logic behind bond repurchases is that the Treasury issues new debt to buy back illiquid old debt from the market. This move is beneficial for hedge funds engaging in “Basis Trade,” as they can lock in profits early and re-enter the market with increased positions. This operation does not directly increase the Federal Reserve’s balance sheet but creates significant leverage in the market, akin to “covert QE.”
Hayes: Bitcoin Has Touched Bottom; Next Stop $110,000+
Hayes stated that he and the Maelstrom fund significantly increased their positions in Bitcoin while it dropped from $110,000 to $74,500, viewing that price level as the “bottom of this bull market.” The rationale extends beyond technical analysis, supported by macro policy logic. He noted, “In the future, the supply of dollars will expand once again, and Bitcoin is the most direct beneficiary.”
What About Altcoins? Alt Season Approaching?
As Bitcoin reaches new highs, capital is expected to rotate towards token projects with actual profit mechanisms. Hayes mentioned that Maelstrom has positioned itself in several high-quality projects that can return profits to stakers, indicating that these “profitable and dividend-paying” cryptocurrencies will be the main drivers of the next surge.
Key Dates: Focus on May 1 and Mid-May
Hayes advises investors to closely monitor the U.S. Treasury’s Quarterly Refunding Announcement (QRA) on May 1 and the tax season income data in mid-May. If these two data points indicate an expanding deficit, it will further confirm that the market is about to face more Treasury supply and covert QE operations, constituting a structural bullish signal for Bitcoin and high-quality altcoins.
Bitcoin Will No Longer Be Just a Shadow of Tech Stocks, but a True Currency Hedge Asset
Hayes remarked, “Bitcoin will shed its label as a Nasdaq High Beta asset and embrace a ‘Up Only’ market environment alongside gold.” Under the policy pressures reminiscent of Trump’s style, the U.S. bond market will require more repurchase tools to stabilize leverage chains, and Bitcoin will emerge as the most robust hedge vehicle in this currency bubble game.
Risk Warning
Investing in cryptocurrencies carries a high degree of risk, with prices potentially experiencing extreme volatility, leading to the loss of your entire principal. Please carefully assess the risks involved.