In his latest essay, Arthur Hayes, the former CEO of BitMEX, discusses the concept of happiness in the context of market states, particularly focusing on the crypto market. According to Hayes, happiness is relative and is tied to our ability to manipulate universal energy. He extends this idea to market states, arguing that bull markets cannot exist without bear markets. Hayes is optimistic about an upcoming, unparalleled bull market in crypto, which he believes will be driven by two major factors: a surge in fiat liquidity and the commercialization of artificial intelligence (AI).

Hayes argues that the world’s leading central banks, including the US Federal Reserve, the People’s Bank of China, the Bank of Japan, and the European Central Bank, will print an unprecedented amount of fiat money in the next 2-3 years. This action aims to rescue their respective government bond markets. He suggests that this influx of “toilet paper money” will largely fund the rapid development and adoption of new AI technologies. Hayes believes that these two trends will coincide to create a “Double Happiness” effect on investment portfolios, particularly benefiting certain cryptocurrencies like Filecoin (FIL).

Despite past criticisms for his repetitive bullish outlook, Hayes remains focused on the long-term market cycles, specifically the 2023-2026 period. He is confident that his investment strategy, based on these cycles, will eventually prove to be correct. Hayes is currently acquiring assets that he believes are undervalued, even if the market doesn’t immediately respond positively.

Hayes also touches upon the issue of excessive debt and its historical impact on civilizations. He notes that governments have traditionally resorted to printing money as a solution to debt problems, a tactic that has often led to the downfall of empires. Hayes cites various financial experts who also express concern about the unsustainable levels of global debt. He speculates that there will come a time when investors will no longer be willing to hold low-yield government bonds, forcing central banks to intervene with their money-printing strategies.

On the topic of AI, Hayes observes that after nearly 70 years of research and development, AI technologies are finally becoming practical and transformative. He anticipates that the forthcoming flood of capital into AI-related ventures will accelerate this trend, marking a historic moment in technological advancement.