Former BitMEX CEO, Arthur Hayes, has shed light on the recent $4.3 billion settlement paid by Binance, attributing it to the exchange’s explosive growth and defiance of traditional financial and political establishments.

Binance, founded by Changpeng “CZ” Zhao, admitted to violating U.S. laws regarding money laundering and terror financing.

In just six years since its inception in 2017, Binance has become the largest global exchange by trading volume, even ranking in the top 10 among traditional exchanges in terms of average daily volume, a testament to its burgeoning global influence.

Hayes contends that the financial and political elite became uncomfortable with intermediaries in the blockchain revolution being controlled by non-traditional actors.

Binance’s role in enabling regular individuals to easily own cryptocurrencies and intermediaries disrupted the established order.

Hayes emphasized that Binance allowed people to participate in the industrial revolution in under 10 minutes through desktop and mobile trading apps.

CZ and Binance bore the brunt of the U.S. Department of Justice’s enforcement actions, paying the largest corporate fine in Pax Americana history.

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Hayes juxtaposed this with previous mainstream banking scandals and the 2008 global financial crisis, where traditional institutions often escaped significant consequences.

Hayes then delved into the economic dynamics of China and the U.S., suggesting that Chinese capital may flow into Bitcoin in the coming years.

Chinese state-owned enterprises and investors, facing limited returns domestically, are seeking offshore investments.

Hayes quoted Peking University professor Michael Pettis, explaining that China’s debt investments don’t yield sufficient returns, prompting capital to enter global markets and support various risk assets.

Hong Kong’s recent approval of licensed cryptocurrency exchanges and brokers opens the door for Chinese companies and investors to purchase Bitcoin.

Having been a dominant force in Bitcoin mining in the past, many Chinese investors are familiar with the asset’s potential as a store of value.

On a macro scale, Hayes proposed that if China increases the availability and affordability of Chinese yuan-based credit, it could lead to a decline in the price of U.S. dollar-based credit.

This, in turn, might cause the prices of fixed supply assets like Bitcoin and gold to rise in dollar terms.

The global nature of fiat credit would likely drive capital into hard monetary assets like Bitcoin.

In conclusion, Hayes outlined a scenario where the success of Binance and changing economic dynamics, particularly in China, could drive significant capital inflows into Bitcoin and other hard assets in the future.

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