BitMEX CEO on ‘Nocoiner’ Roubini, Bitcoin Price Action, and Facebook’s Libra

On Tuesday (July 2), day one of the two-day Asia Blockchain Summit 2019 in Taipei, Arthur Hayes, Co-Founder and CEO of BitMEX, the world's largest crypto derivatives exchange, talked about his feud with economics professor and blochain/crypto skeptic Dr. Nouriel Roubini (aka "Dr. Doom"), Bitcoin's recent price action, and Libra, Facebook's upcoming cryptocurrency.

The BITMEX CEO's comments came during an interview on "Bloomberg Daybreak: Asia". This article looks at the main highlights of this interview.

Feud With Nouriel Roubini

Roubini, who calls himself an expert in asset bubbles, teaches at New York University's Stern School of Business, and is chairman of Roubini Macro Associates LLC, an economic consultancy firm. He has long been the harshest critic of blockchain technology and cryptocurrency. 

For example, in an interview (published on March 6) with the CFA Institute, he explained why he considers crypto to be "the mother and the father of all bubbles." During 2018, Roubini repeatedly referred to blockchain as "a glorified Excel spreadsheet" and "one of the most overhyped technologies ever".

As for Bitcoin, as far back as 2014, Roubini was attacking it, calling it "a Ponzi scheme", a "lousy" store of value, and "a conduit for criminal/illegal activities".

More recently, he has focused his attacks on BitMEX, the world's largest (by notional trading volume) and most successful crypto derivatives exchange. For instance, this is what he said about BitMEX on June 26:

And this was Hayes' reply:

The meeting referred to by Hayes in the above tweet is his upcoming debate ("The Tangle in Taipei") with Roubini, which is scheduled to take place tomorow (July 3) at 09:00 (UTC + 08:00) on day two of Asia Block Summit 2019.

When the Bloomberg interviewer asked Hayes about this recent feud with Roubini, this was the reply:

I mean, he is a hater, a nocoiner... someone who doesn't have any Bitcoin... [He's saying] our volumes are fake, there is no real market action going on, and we beg to differ. There is actually real trading going on... We did about a trillion dollars over the past year. So, the trading volumes speak for themselves.

Bitcoin's Price Action

Next, Hayes was asked about Bitcoin's parabolic rise in price. Hayes said:

Well, we went down from $20,000 to $3,000 over the past 18 months, and this is sort of the rebound. So, it took us two and a half months or so to go from $3,000 to $10,000. In 2017, we started the year at $1000 and by November, we were at $10,000. So, this is sort of like the high watermark for a lot of investors.

Then, Hayes was asked if the recent rally that took the price of Bitcoin from $10,000 to almost $14,000 over a few trading days was caused by demand from retail investors since it seemed that the heaviest trading activity was taking place at weekends.

Hayes answered:

I think it's still a retail-led phenomenon. The sentiment is back. There's been positive developments. You have Facebook's Libra, a stablecoin which some people believe will bring a few billion people into the digital payments ecosystem...

Another interesting answer came when Hayes was asked why should anyone invest in Bitcoin:

I think it's a call option. So, either Bitcoin is going to be worth zero or a lot of money, in say a decade. So, your premium is essentially the price of Bitcoin today.

Facebook's Libra Coin

Finally, the interviewer asked Hayes what he makes me of Libra. Hayes replied:

I think it will destroy commercial and central banks.