BitMEX founder Arthur Hayes, through a lengthy article titled “Chief Story Officer,” explores how humans deal with uncertainty and the importance of narratives in investment decisions. He emphasizes that investors in the cryptocurrency field are more concerned with compelling stories that have the power to spread than with technical or factual trends.
Table of Contents
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Hayes: We Are All Speculators
Hayes: Story is More Important than Technology
Hayes: I am the Maelstrom “Chief Story Officer”
From “Doubt” to “Optimism”
Implying the Coming of the Shitcoin Season?
Hayes: I Will Continue Telling Stories Whether You Buy or Not
Arthur Hayes, after strongly criticizing the Cardano (ADA) token yesterday, has released an article titled “Chief Story Officer,” explaining the importance of narratives in the crypto market, which often surpasses the technology itself. He has now shifted his focus to shitcoins.
(BitMEX Founder Slams ADA as Shit, Tells Charles Hoskinson: Go Buy Some ETH)
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The article first mentions the claim that people are all speculators, believing that everyone’s brain constantly constructs probabilistic maps of the environment and makes decisions based on perceived probabilities of various outcomes, rather than objective facts:
Since we cannot accurately estimate the probabilities of every variable and data, our decisions often follow the opinions and actions of others.
Hayes claims that the above argument can also be applied to the crypto market, believing that investors often rely on the evaluations of others and the spread of narratives to make investment decisions, thus the importance of narratives must surpass the technology itself:
The story behind a token or project is often more important than the technology because the general public finds it difficult to evaluate the merits of technology but can easily understand the quality of a story.
He adds, “It is the story that shapes investors’ perception of a specific token, not objective facts or the value of technology. Therefore, a successful story can drive the token price increase.”
In this regard, Hayes mentions his own position as the Chief Story Officer of Maelstrom Investments and jokingly suggests changing it to “Chief Story Officer”:
I am responsible for telling stories. The simpler and more compelling the story, the faster it spreads. The more widely the story spreads, the more the associated token can appreciate.
He explains that the purpose of packaging a project with narratives is to influence investors’ emotions and behaviors, using himself as an example:
I would rather invest in a token with a perceived success probability of 0.01% but has a viral story than a token with a perceived success probability of 50% but its story has reached the stage where it is widely known by the public.
Hayes emphasizes that when his company, Maelstrom, invests in crypto projects, it is important to determine which project has the best probability of success in terms of storytelling. This probability is related to the widespread dissemination of the story, including macro narratives (industry trends, etc.) and micro narratives (competitive advantages of the project):
By raising investors’ expectations of a project from “impossible to succeed” to “possible to succeed” through storytelling, the highest investment returns can be achieved.
In other words, a good investment lies in a team’s ability to transform investors’ view of their project from “doubt” to “optimism” through telling a captivating story, thereby increasing the chances of success.
Furthermore, with the recent approval of a Bitcoin spot ETF in the United States and the highly anticipated potential Ethereum spot ETF event, Hayes believes that these narratives and market sentiments will continue to drive up the prices of these two assets, while he himself will prioritize shitcoins:
I already hold BTC and ETH, and I may continue to buy more, but overall, I am shifting my focus to shitcoins.
At the end of the article, Hayes also states that in the future, he will focus on the tokens held by Maelstrom that have already been launched or are about to be launched, and he will continue to spread token information far and wide through storytelling:
I don’t care if you have traded any of the tokens I mentioned. What matters to me is whether I have provided compelling stories and supporting arguments that encourage you to discuss them actively with others.
At the same time, he reveals the topics he will discuss in relation to crypto projects:
dYdX
GMX
Pendle
Krav
Elixir
Flare
Ethena
Axelar
Arthur Hayes
BitMEX
Shitcoin
Ethereum ETF
Further Reading:
Michael Saylor: Demand for Bitcoin Spot ETF is 10 Times the Supply, Will Continue Buying Bitcoin
Bitcoin Surpasses Silver as the Second Largest ETF in the US in Just Five Days, Second Only to Gold