Controlling The Narrative: BitMEX CEO Arthur Hayes Says ‘There’s Something Going On Here In Crypto’

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Written by Dana Sanchez
Arthur Hayes, CEO of BitMEX. Photo: BitMEX


Arthur Hayes, co-founder and CEO of derivatives trading platform BitMEX, was the target of a public display of volatility this week after speaking in a debate at the Asia Blockchain Summit in Taipei.

At the summit, Hayes debated blockchain critic and economist Nouriel Roubini, a New York University professor and the CEO of Roubini Macro Associates. The event was less than transparent.

Hayes controls the rights to the footage of the debate and didn’t allow it to be streamed live. The audience was also prevented from recording video of the event, according to Bloomberg.

Some Twitter users called for the debate to be released.

The debate centered around whether cryptocurrencies are a scam or the future. Roubini and Hayes, of course, had opposite views.

Roubini said the cryptocurrency industry is vulnerable to “shitty behavior” — scammers and criminals, according to The Block. Bitcoin is “not secure, not decentralized and is not even scalable,” the economist said.

Roubini demanded in a tweet that Hayes release footage of the debate, calling Hayes a coward for hiding it and insisting that the only reason Hayes doesn’t want the tape to go public is that Roubini won the debate.

Hayes laughed about Roubini and the debate which was promoted as “The Tangle in Taipei”.

“He’s a hater, he’s a no-coiner,” Hayes said during an interview on Bloomberg’s Daybreak Asia on the sidelines of the Asia Blockchain Summit. “He’s someone who doesn’t have any bitcoin and hasn’t watched the price skyrocket in their face over the past few years.”

A former CitiGroup trader, Hayes runs BitMEX, a Hong Kong-based crypto exchange that allows up-to-100 times leverage when buying and selling cryptocurrency derivatives.

“Not just another Wall Street veteran, Hayes may also be one of the industry’s biggest bitcoin bulls,” Ash Bennington wrote for CoinDesk. “Hayes thinks blockchain is lighting a fuse that will ignite open combat between ‘true cryptocurrencies’ (like bitcoin) and a new ‘digital fiat’ controlled by central banks.”

In addition to derivatives and all-coin swaps, BitMEX plans to launch zero coupon bitcoin bonds within the next few weeks.

“We want to start a market where people can actually earn yield on a bitcoin by investing and loaning bitcoin to some of the most stable companies in the space,” Hayes said.

Hayes is accustomed to overcoming objections about bitcoin — the idea
that “you guys are basically living on the air” and that there’s no real market action. He’s been accused of faking volumes.

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“We beg to differ,” Hayes told Bloomberg.”There’s actually real trending going on. We did $60 billion — our highest 24-hour trading record. We did about $1 trillion over the past year. There’s something going on here in crypto and the price action and volume speak for themselves.”

Over the past 18 months, bitcoin went down from $20,000 to about $3000. In the current rebound, it took two-and-a-half months to go from $3000 to $10,000. In 2017, bitcoin started out at $1000 and by November was at $10,000.

“This is sort of a high watermark for a lot of investors. We’ve seen the price go from $10,000 to almost $14,000 in the span of a few trading days. There’s something behind it,” Hayes said.

Hayes said he thinks retail is leading the phenomenon. “The sentiment is back,” he said. “There’s been new developments — the Facebook Libra, stablecoin, which some people think will bring a few billion people into the digital payments ecosystem. That’s very bullish. You also have the rebound. It took two years for people to pay their balance sheets and now they’re back trading crypto.”

Why would I put money into bitcoin and not gold?

“Gold is the analog,” Hayes said. “If you want to transport $1 million of gold, that’s very heavy. Now with a wallet, you can transport a vast amount of wealth anywhere you go. If we are really moving into a digital economy then the way we store wealth — well, the hard assets that is pricing wealth — must change. And I think bitcoin could be that asset.”

Biggest risk for bitcoin trading platforms

Hayes identified hacking as one of the biggest risks ahead for BitMEX and other trading platforms.

“We hold other peoples bitcoin,” Hayes told Bloomberg “If we get hacked, traders can lose their collateral and that’s the same with any exchange. We always caution traders only hold bitcoin or other crypto assets in the amount that you’re actually going to trade with on an exchange.

“The purpose of bitcoin and these crypto assets is to become your own financial institution and custody of your own assets. Don’t leave them on the exchange if you don’t need them.”

On Facebook’s Libra coin

Hayes predicts that Facebook’s proposed libra coin will be a gamechanger. “I think it will destroy commercial and central banks,” he said.

As for the debate with Roubini at the Asia Blockchain Summit, Hayes told Bloomberg he plans to release highlights of the debate at a later time.