Compiled & Edited: Deep Tide TechFlow

Guest: Arthur Hayes, Co-founder of BitMEX, Chief Investment Officer of Maelstrom

Host: The Rollup hosting team (one of whom is mentioned as Andy in the show)

Podcast Source: The Rollup (YouTube)

Original Title: Arthur Hayes: Why Ethereum Is My Biggest Position Right Now (Most Hated Mega Cap)

Broadcast Date: September 14, 2026

Duration: About 8 minutes and 39 seconds

Disclaimer: Arthur Hayes is the Chief Investment Officer of Maelstrom, and he clearly stated in the show that Ethereum is his fund's largest position, alongside smaller positions in EtherFi (ETHFI) and Ethena (ENA). He has previously openly held Bitcoin and has been involved in issuing his own tokens. The target price and macro assumptions in this text are his personal judgments and do not constitute investment advice.

Key Takeaways

What he bought: Ethereum is the largest position. The reason is not the strongest technology, but because it is "the most hated." His logic is that if you want to add the biggest risk exposure outside of Bitcoin, without worrying about losing 75% overnight due to protocol issues, your only choice is Ethereum. And it happens to be the worst-performing large-cap coin in the last round, not breaking the historical high of $5,000 since 2021. In his view, this "failure to break the previous high" is not a warning, but an entry pattern. The other two smaller positions are EtherFi and Ethena.

Why being "hated" is actually a buying point. Among large-cap coins, those that skyrocketed have already priced in positive news; Ethereum has been criticized for four years and its price lies below the previous high, meaning the market has no expectation for it, giving limited downside and still having upward potential. This is a replicable screening thought process: find large-cap assets where the fundamentals have not broken down, but the sentiment has already hit rock bottom.

What he really wants to talk about is timing: the Federal Reserve's balance sheet expansion needs a genuine crisis first. He said that although the Federal Reserve's balance sheet is increasing now, the magnitude is far less than in 2020 or 2009, which is why Bitcoin has only moved from 63,000 to 80,000. To accelerate the expansion "reasonably," politicians need a credible reason, i.e., a real crisis.

Leading indicator for readers: the euro to yen exchange rate. This is the number he repeatedly emphasizes. Two chains: on the yen side, Japanese institutions are selling dollar assets to convert to yen, and the Federal Reserve needs to lend dollars to them to prevent them from actually selling; on the euro side, large French banks led by BNP Paribas, Crédit Agricole, and Société Générale account for 20% of the US repo market, while the Japanese hold a large amount of French government bonds. France cannot print money legally under the euro framework, and once it reaches a point where it needs to rescue its own bond market, it can only force a "soft exit from the eurozone."

How this translates to price. His estimation is: if the euro to yen exchange rate drops from 182 to 140 or even 120, the French banking system will encounter serious problems, and the solution can only be printing money, which means the end of the euro. Only after this path is taken does Bitcoin reach $250,000 or $500,000. His original words are that it's not something the finance minister can achieve merely by declaring it.

Summary of Brilliant Views

On why he heavily invests in Ethereum

"Ethereum is the most disliked large-cap coin. If you want to take the biggest risk outside of Bitcoin, without worrying about losing 75% overnight due to a protocol issue, that is Ethereum."

"Thank goodness, it is the worst-performing large-cap coin from the last round, not even breaking the historical high of $5,000 in 2021."

"The risk-reward ratio of Ethereum is very good, which is why it is our largest position entering this round of liquidity market."

On why the Federal Reserve needs a crisis

"Now Bitcoin has just gone from 63,000 to 80,000, how cool, whatever, it’s not a big deal. Because although the Federal Reserve's balance sheet is increasing, it’s not crazy compared to the past."

"To bypass the perception issue of the Federal Reserve's balance sheet explosion, you need a real crisis."

On the euro and France

"The large French banks led by BNP Paribas, Crédit Agricole, and Société Générale dominate 20% of the repo market."

"France cannot legally print money under euro rules. But new politicians coming to power may say, 'Screw it, I am the president of France, not the president of the EU; the French people need more money.'

"This is a self-fulfilling prophecy; a soft exit from the eurozone will certainly happen because neither side is willing to compromise."

"Printing money signals the end of the euro. You cannot let France print money unilaterally while the money does not come from the European Central Bank."

On the conditions for the target price

"This is the path for Bitcoin to reach $250,000 and $500,000. It’s not something the finance minister can declare and make happen."

Main Text

Why the largest position is Ethereum: Because it is the most hated

Host: Let's talk about your portfolio. You have mentioned creating what might be the largest Ethereum position in history, and your long-term view hasn't changed. The audience might say that once the show airs, you will dump Ethereum on them. Prove them wrong. What is your argument, how long do you intend to hold, and what does your portfolio look like?

Arthur Hayes: Ethereum is the most disliked large-cap coin. Ultimately, if you want to take the biggest risk outside of Bitcoin while not worrying about losing 75% overnight due to a protocol issue, that is Ethereum. And thank goodness, it is the worst-performing large-cap coin from the last round, not even breaking the historical high of $5,000 in 2021. That is why I believe the risk-reward ratio for Ethereum is very good, which is why we made it our largest position entering this round of liquidity market. We also paired some similar assets, but with much smaller positions, like EtherFi and Ethena.

Note: Here, "risk-reward" is his original speech. In simple terms, what he means is that the coins that have surged have priced in their positive news, while Ethereum has been criticized for four years and is still below its previous highs, which means the market has no expectation for it, offering limited downside and still having upward elasticity.

The Federal Reserve needs to massively expand its balance sheet, but there must be a real crisis first

Host: I want to follow up on Andy's question about timing, along with your earlier mention of capital misallocation. In your recent article, you said that the euro to yen exchange rate is the only number that can tell you in advance whether US dollar liquidity will accelerate, being the second derivative of the Bitcoin devaluation trade understood by everyone, meaning the acceleration of money printing. Why the euro to yen? How can it tell us that the Federal Reserve will start to ease faster?

Host: One more thing. Bessenet has been signaling to the market, which looks at expectations. In a recent interview, he talked about potential and momentum, stating that he would repurchase long-term treasuries, and the market might run ahead, which is a lot of momentum. So will it ultimately turn into buying momentum and selling dynamism, buying expectations and selling facts? Or will the momentum really deliver what he’s said, and we will see enough actual money printing to push the market higher than the levels implied by the signals alone?

Arthur Hayes: We are now increasing positions, betting that the Federal Reserve's balance sheet will expand like it did in 2020 and 2009. It is indeed rising now, but compared to the past, it’s not insane, that's also why Bitcoin has only moved from 63,000 to 80,000, how cool, whatever, it’s not a big deal.

Arthur Hayes: To bypass the perception issue regarding the Federal Reserve's balance sheet explosion, you need a real crisis. What constitutes a real crisis?

Note: The "perception issue" refers to the Federal Reserve needing to explain to the public why it is expanding its balance sheet on a large scale. Without a crisis as a cover, printing money is politically unexplainable.

On the yen side: Japan is selling, and the Fed needs to lend them dollars

Arthur Hayes: Let's first look at the yen side. In the euro to yen currency pair, the party going long on yen is involved: Japan’s Government Pension Investment Fund is selling, Nomura is selling, and Mrs. Watanabe is also selling because the Japanese government requires them to do so.

Arthur Hayes: So we need to lend them money so they don’t actually have to sell their assets but instead can use them as collateral for buybacks. This is a pillar of balance sheet expansion that will push up the yen.

Note: Mrs. Watanabe is a name used to refer to Japanese retail investors, suggesting that Japanese household funds are also converting overseas assets into yen. The mechanism here is: Japanese institutions need to sell dollar assets, and if they truly sell, it would impact US treasuries drastically, so the Federal Reserve's swap lines essentially lend them money to avoid actual sell-offs. This process itself is expanding the Federal Reserve's balance sheet.

On the euro side: French banks dominate 20% of the US repo market

Arthur Hayes: What’s the situation with the euro? The repo market. The large French banks led by BNP Paribas, Crédit Agricole, and Société Générale account for 20% of the repo market. This data comes from the US Treasury.

Arthur Hayes: If there is trouble with the euro, the first to be affected will be France because the Japanese hold a lot of French government bonds.

Arthur Hayes: They cannot sell US assets because the US has dozens of military bases in their country. So, they will sell European assets. What will they sell first? French ones. Selling French government bonds and bonds from French banks.

Arthur Hayes: As the situation in France deteriorates, they cannot legally print money under euro rules. But new politicians will say, 'Screw it, I am the president of France, not the president of the EU. I am here to serve the French people, to serve the French nation. The French nation needs more money; it needs to devalue its currency within the euro framework. Since I don’t plan to exit the euro, let the Banque de France engage in quantitative easing.' This is illegal under the EU charter, but screw the EU, I am here for France, and I need to save my bond market.

Arthur Hayes: Then the EU will say, fine, I can print euros to save your bond market, but your performance has been too poor. So I will not buy your things. Thus, this becomes a self-fulfilling prophecy: a soft exit from the eurozone will definitely happen because the power structures on both sides do not allow them to compromise.

Note: The "soft exit from the eurozone" refers to France nominally remaining within the eurozone but effectively bypassing EU rules to print money for its own bond market relief. If the printed money does not come from the European Central Bank, the unity of the euro will become nominal.

What happens if the euro to yen drops to 140: This is the path for Bitcoin to 250,000

Arthur Hayes: This is the sell side of the euro. Since French banks are indeed in the repo market, and we have already seen the Federal Reserve pivot to quantitative easing last December, essentially backstopping the repo market. The repo market is where US short-term treasuries are financed. Now, who is issuing short-term treasuries the most? It is Secretary Bessenet. So this is the same transaction.

Arthur Hayes: If the euro to yen drops from 182 to 140 or 120, the French banking system will face very serious issues, and these problems can only be resolved by printing money. Printing money signals the end of the euro. You cannot allow France to print money unilaterally if the money is not coming from the central European Central Bank.

Arthur Hayes: By that time, if the French banks are sold off due to capital control risks, they will have to exit the repo market and repatriate capital. And I am already doing this. I can casually talk about duration, why this isn’t called quantitative easing, how technical it is, and then hope the American public is too dumb to understand what I’m really doing. This is how money is printed from the sell side of the euro. This is also why I believe the euro to yen exchange rate is telling us that the Federal Reserve must very quickly increase the money supply; both of these technical reasons are at play.

Arthur Hayes: This is the path for Bitcoin to reach $250,000 and $500,000, not something that Secretary Bessenet can achieve just by declaring it.

Host: And this politically has a cover because they are repatriating capital, it’s good for France and provides a public explanation to their citizens. The US side will also follow suit. Did you nickname him "Buffalo Bill Bessenet" because he issued a lot of short-term treasuries?

Arthur Hayes: No, that nickname comes from "The Silence of the Lambs." Buffalo Bill is a serial killer; he is the nation's serial killer. If you don’t smear dollars on his skin, just wait to be sanctioned again. You do business with Iran, and we will come after you.