Election, Oil Price, and Money Printer: Why Bitcoin Only Looks at Trump

Original Title: Smoothly
Original Author: Arthur Hayes, Crypto Trader Digest
Translation: Peggy, BlockBeats

Editor's Note: Amidst the noise of geopolitics, electioneering, and macro narratives, in this article, author Arthur Hayes (co-founder of crypto exchange BitMEX) deliberately avoids moral judgment and values alignment. Instead, he takes on a cold-eyed trader's perspective, compressing complex issues into a few core variables that can be market-verified: nominal GDP, oil prices, credit expansion, and the consequent pricing of risk assets.

As one of the most controversial and representative voices in the crypto market, Hayes consistently dissects the trading implications behind political events from the standpoints of power, liquidity, and price. In this article, he distills the U.S. election, energy prices, and money-printing logic into a naked question: Will the money printing continue, and will risk assets continue to rise?

The following is the original text:

A "Overheard Conversation"

Scene: U.S. President Donald Trump connects via video link to a plane carrying Venezuelan President Pepe Maduro from Caracas to New York.

Trump: Pepe Maduro, you're one bad hombre. Your country's oil is now mine. USA! USA! USA!

Pepe Maduro: Damn it! You crazy American.

I can imagine at this moment, a group of Venezuelan expatriates in the "Drug-Financing Capital of the Western Hemisphere" — Miami, USA — are completely letting loose, dancing to the rhythm of Elvis Crespo's "Suavemente."

As a qualified "armchair general" macroeconomic gambler, I must, of course, offer my opinion on this historic, game-changing, dictatorial, militarized... insert whatever superlative or pejorative you want here — U.S. "kidnapping/legal arrest" of a sovereign nation's leader.

I'm sure countless AI-assisted writers are churning out millions of tokens of "word salad," attempting to qualify, model, and predict the course of these events. They will moralize these actions from a high ground and tell you how other countries "should respond."

I do none of that.

I only care about one question: Will the U.S. colonization of Venezuela cause the price of Bitcoin/cryptocurrency to rise or fall?

I'm a ski bum, and in order to make sense of this chaotic universe, I need a simple analytical framework. Once again, let me emphasize: all politicians elected through democratic elections have one core goal at all times, which is re-election.

Glory to God, loyalty to the nation, or any lofty ideals come after winning votes. This is because if you are not in a position of power, you cannot make any changes. In this sense, this obsession with re-election is "rational."

For U.S. President Trump, there are two elections that truly matter: the November midterms and the presidential election in 2028.

Although he himself will neither seek re-election in 2026 nor be able to run for president for a third time in 2028, the loyalty and obedience of his political supporters depend on whether they can each successfully secure re-election. Today, people are constantly "defecting" from within the tattered MAGA tent because they are worried that if they continue to act according to Trump's demands, their future electoral prospects will dim.

So the question is: What can Trump do to ensure that those who have not yet decided where to stand — those middle-of-the-road voters who are not fully "blue team Democrats" or fully "red team Republicans" — walk into the polling stations in 2026 and 2028 and vote "in the right way"?

As of now, the blue team (Democratic Party) is poised to retake the House. If Trump still wants to come out on top, he needs to quickly get things in order; there is not much time left for policy U-turns and inducing voters to switch sides.

Most importantly, I will use some statistics and charts to prove that the only issue the median voter truly cares about is the economy. The cultural issues that Trump's opponents and supporters obsess over on social media (although the memes are indeed good), pale in comparison to whether voters feel "richer or poorer" when they walk into the voting booth and pull the curtain.

Stimulating the economy is actually quite easy; I'm referring to nominal GDP. This is essentially just one question: How much credit is Trump willing to create. An increase in nominal GDP will drive up financial asset prices; the wealthy will also "dutifully" hand over their "bribes" — ahem, I mean, make campaign donations to the red team as a show of gratitude. But in America, the rule is one person, one vote, and if alongside the rise in nominal GDP, there is a surge in inflation, the lower-income groups have the complete ability to drag down the entire party.

Trump and U.S. Treasury Secretary "Wild Bill" Benshot have stated that they will let the economy run hot. I believe they will do so, but the question is: how do they plan to control inflation?

The inflation that will truly sink re-election prospects is food and energy inflation. For Americans, the most crucial indicator is gasoline prices, as usable and affordable public transportation is almost nonexistent for most people. In the U.S., if you are a proletarian laborer without a car, you can hardly live a normal life—unfortunately, but that's reality. It is for this reason that Trump and his aides are willing to "colonize" Venezuela for oil.

When it comes to Venezuelan oil, many will immediately point out: this country has the world's largest proven oil reserves. But the question is, who cares how much oil you have underground? The key is: can this oil be extracted profitably?

I don't know the answer to this question, but Trump apparently believes that as long as he turns the valve, Venezuelan oil will flow continuously to the refineries along the Gulf of Mexico, and cheap gasoline will appease the lower classes by suppressing energy inflation. I cannot say whether Trump is correct, but the WTI and Brent crude oil markets will become the real "truth serum".

The question is: as nominal GDP and U.S. dollar credit supply rise, will oil prices rise or fall?

If GDP and oil prices rise together, the winner is the blue team Democrats; if GDP rises but oil prices stagnate or fall, the winner is the red team Republicans.

The most ingenious part of this analytical framework is: will oil prices reflect all other oil-producing nations and military powers—especially Saudi Arabia, Russia, and China—and their reactions to the U.S. "colonizing" Venezuela.

Another advantage is: the market is reflexive. We all know that Trump will adjust policies based on the stock market, U.S. debt, and oil prices. As long as the stock market continues to rise and oil prices remain low, he will continue to print money, expand, and act around oil.

As investors, we can react on a time scale almost synchronous with Trump—this is the best outcome we can expect. This approach reduces the need to predict the ultimate outcome of an extremely complex geopolitical system. Look at the charts, go with the flow, gamblers.

Below are some charts and statistics that clearly show: if Trump wants to win the election, he must boost nominal GDP while aggressively pushing down oil prices.

The Red Team and the Blue Team are evenly matched.

Only a small fraction of Americans determine which party ultimately controls the government.

The economy and inflation are the two main concerns for voters, nothing else matters.

“10% Rule”: If, in the three months before an election, the national average gasoline price has risen by 10% or more compared to the average level in January of the same calendar year, one or more branches of the government often undergo a change in party control.

Bitcoin Mooning

Due to the energy-intensive nature of Proof of Work (PoW) mining, Bitcoin is the purest form of monetary abstraction. Therefore, energy prices themselves have no direct relationship with the price of Bitcoin—because whether energy prices rise or fall, all miners will simultaneously face the same direction of cost change.

Where oil prices truly matter is whether they will force politicians to stop printing money. If due to economic expansion (where economic activity itself is a derivative variable of energy), oil prices rise too quickly and too high, then politicians must find a way to push oil prices down—such as by "getting oil from elsewhere" or slowing down credit creation—otherwise, they risk being voted out of office by the electorate.

The 10-year US Treasury yield and the MOVE Index, which measures US bond market volatility, will tell us whether oil prices have become unbearable.

Investors face a difficult choice: investing in financial assets or investing in physical assets.

When energy costs are low and stable, investing in government bonds and other financial assets is reasonable; but when energy costs are high and volatile, it is more prudent to store wealth in energy commodities.

Thus, when oil prices reach a certain level, investors will demand higher returns from government bonds, especially 10-year US Treasury bonds. US politicians cannot stop deficit spending because "free money" is always a winning strategy in elections.

When oil prices rise and the 10-year Treasury yield approaches 5%, politicians have to change their behavior. The reason is: as the 10-year yield nears 5%, the massive leverage embedded in this dirty fiat financial system starts to spiral out of control, and bond market volatility (measured by the MOVE index) will sharply rise.

The entire fiat system is fundamentally a highly leveraged carry trade. When volatility spikes, investors must sell assets, or even their custom Savile Row suits won't save them.

A recent example is: last year's April 2nd "Liberation Day," followed by the April 9th "Trump TACO" event.

If you recall, at that time, Trump threatened to impose exorbitant tariffs, high enough to truly disrupt global trade and financial imbalances — which would be highly deflationary at a macro level. The market immediately plunged, with the MOVE index spiking intraday to a high of 172.

Then, the day after the volatility spike, Trump "blinked" (TACO), announcing a "pause" in tariff measures, and the market bottomed out, followed by a rapid and robust rebound.

MOVE index (white line) vs. Nasdaq 100 index (yellow line)

Trying to use historical data to determine at what levels of oil prices and 10-year U.S. Treasury yields Trump would tighten the Fed's printing press is meaningless. When it actually happens, we will naturally know; if oil prices and yields start to spike, it means — time to be cautious on risk assets.

The base case is: oil prices stay low, even drop outright, while Trump and "Buffalo Bill" Benson go on a money-printing spree as they did in 2020. The reason is, the market will initially believe: U.S. control of Venezuelan oil will lead to a massive increase in crude oil production. As for whether these optimistic forecasts of a surge in oil supply can materialize once engineers truly bring millions of barrels per day of capacity online, no one can say for sure.

But that doesn't matter. You just need to remember one thing: Trump will run the printing press faster than Israeli PM Benjamin "Bibi the Butcher" Netanyahu cycles through "why Iran deserves another military strike" talking points.

If this logic isn't enough to convince you that now is the time to go long on all risk assets due to America's radical money printing, then remember — Trump is the most "socialist" U.S. president since Roosevelt.

He once printed trillions of dollars, and unlike past presidents, in 2020 he sent money directly to everyone. You better believe he will never lose an election due to "running out of money."

Mamdhani and Trump are both New Yorkers, you know — birds of a feather flock together.

A true trader must stop projecting emotions onto words like "socialism, communism, capitalism." No government truly adheres to these "-isms"; everyone is simply distorting and assembling these concepts for their own political purposes.
Don't be a sucker, just buy directly.

If we understand the situation according to Trump and his staff, one thing is certain: credit will definitely expand.

Red Team Republican legislators will continue deficit spending; the Treasury led by "Buffalo Bill" Benson will issue bonds to finance it; and that "Beta Soy, Towel Boy" Jerome Powell and the Fed under his and his successor's leadership will print money to buy those bonds.

This "self-hyping loop" truly kicked off in 2008. As Lyn Alden put it: "There's nothing to stop this train."

As the quantity of dollars continues to inflate, the price of Bitcoin and some cryptocurrencies will skyrocket.

The rise of Bitcoin (digital gold) is directly linked to money printing. This can be clearly seen in the Dollar Liquidity Conditions Index I've constructed (Bloomberg code: .USDLIQ U Index).

Trading Tactics

Before discussing Maelstrom's current position, I would like to quickly review my trading performance from last year.

When I say "my performance," it's because all trading decisions were made by me personally. Last year, my overall liquidity steering wheel was profitable. My goal was to cover daily expenses with trading profits, and I have achieved this multiple times. Although ultimately profitable, I also wasted a good amount of PNL on several bad trades.

My biggest loss came from immediately participating in trading the PUMP token right after it launched. Additionally, I also had to stay away from meme coins — the only meme coin I made money on was TRUMP.

The good side is: my most profitable trades came from HYPE, BTC, PENDLE, and ETHFI.

Only 33% of last year's trades were profitable, but my position sizing was on point: the average return of profitable trades was 8.5 times the average loss of losing trades.

This year, I will improve my performance by focusing on what I'm truly good at: building medium-term large positions based on a clear macro liquidity narrative, and this narrative must be able to support a "sounds reasonable" shitcoin story. As for those meme coins or junk coins that are purely for fun, I will significantly reduce position sizes.

Looking ahead, the core market narrative this year will revolve around privacy. ZEC will be the beta of the privacy track, and we have already built a significant long position in ZEC at a great price in the third quarter of 2025.

The current focus of the Maelstrom team is to find at least one shitcoin leader in the privacy narrative that can truly outperform and bring excess returns to the portfolio in the coming years.

As we enter 2026, Maelstrom's risk exposure is almost maxed out. We will continue to redeploy idle cash generated from various financing trades into Bitcoin, so our stablecoin position is very low.

To achieve excess returns relative to BTC and ETH: I will sell BTC to increase exposure to privacy-related assets; I will sell ETH to increase exposure to DeFi. In both cases, as long as I choose correctly, with fiat credit continuing to expand, these shitcoins I hold should outperform mainstream assets.

If/when oil prices rise and lead to a slowdown in credit creation, I hope to take profits at that time, stack more sats, and buy some mETH.

What a fulfilling day.

I wrote this article on a skiing day off in the wilderness. Now it's time to hit the gym hard, lift some heavy iron, make sure that when I "come out of hibernation" in March, my physique is still incredibly strong.

[Original Article Link]