Arthur Hayes has a message to cryptoinvestors and Bitcoin (BTC) Hodlers, occupying over the Federal Reserve policy like the US and China empty against a trade agreement: You see the wrong institution.

“The real show is on the Ministry of Finance. Ignores Fed. It doesn’t matter,” Hayes told Coindesk in a recent interview. “Powell doesn’t mean anything in 2022 under a democratic regime, and he doesn’t mean anything now under a Republican.”

For Hayes, Federal Reserve has become a sideshow. The real monetary handle-pulling, he argues, is happening under Treasury Secretary Scott Bessent, who quietly reshapes the global liquidity with repurchase and auction strategies designed to control a ballooning American debt load.

This flood of liquidity, paired with America’s inability to empty expenses, is the reason why Hayes says Bitcoin is on its way to $ 1 million by 2028.

“All we love is whether there are more dollars in the system today than yesterday,” Hayes said. “That’s all that matters.”

But monetary policy is not the only catalyst in his view. Hayes sees that geopolitics are also burning the fire, especially the performative trading diplomacy between the United States and China. As both sides, Hayes says they are likely to sign a deal that looks bold on paper but does not change any of substance.

“It will be a deal on the surface,” he said. “Trump has to prove that he has been tough against China. Xi has to prove that he got up to the white man.”

After all, China has proven with its policies in the Covid era that it can withstand more financial pain. With customs persons who are politically risky, Hayes believes that the next step will tax foreign investment, a quiet form of capital control intended to reduce America’s dependence on foreign buyers without getting domestic voters. Here’s how to make the American people swallow an adaptation of trade.

“The only real policy that actually works is capital control,” he said.

Potentially, there are several tools on the table. Not only taxes on foreign government bonds or shares, but more aggressive ideas such as forced bond swaps, dealing with 10-year notes for 100-year paper or higher withholding tax on capital gains from US assets.

It’s all part of a strategy for rebalans the financial account without forcing Americans to “buy smaller things,” a message he says no politician can sell.

“Americans don’t like to do hard things,” he added. “They won’t be told you have to consume less.”

China will continue to be poured into US assets

China, meanwhile, doesn’t go anywhere. Hayes says it has no choice but to continue to buy US assets, even if it pretends to.

“They have to obscure the kind how much they buy out of America … But mathematically, they just can’t stop.”

For Hayes, all this leads to a place: More money smashing through the system and Bitcoin absorbs the overlay.

His portfolio reflects that thesis: 60 to 65 percent in Bitcoin, 20 percent in ether (ETH), and the rest in what he calls “quality skitcoins.”

Why? Because the market is finally looking for coins that actually work.

“We are in basic seasons. People are tired of coins that do nothing,” said Hayes.