Arthur Hayes’ maelstrom fund hedges U.S. election Rrsk with USD stake
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With the U.S. election approaching, Arthur Hayes, co-founder of BitMEX and head of Maelstrom, a digital asset investment fund, is preparing for potential market turbulence. Maelstrom has allocated 5% of its assets to staked USDe—a synthetic dollar stablecoin by Ethena Labs—to hedge against price swings. This strategic move enables Maelstrom to earn a 13% yield on USDe while holding large bullish positions in Bitcoin (BTC) and Ether (ETH).
Arthur Hayes’ Maelstrom Fund Hedges U.S. Election Risk with USDe Stake
Leveraging USDe for Election Uncertainty
Hayes’ choice of USDe allows the fund to stay invested in a delta-neutral product during uncertain times. USDe maintains its $1 peg using a hedged cash-and-carry strategy on BTC and ETH futures, generating yield through funding fees from short positions. According to Hayes, the fund will shift back to crypto once the election results are clear and the losing side accepts the outcome.
Market Impact of Election Results
Hayes foresees potential unrest if the losing party disputes the results, likely causing short-term volatility for risk assets like cryptocurrencies. However, in the absence of unrest, Hayes expects the markets to rally post-election. Despite uncertainties, Hayes sees limited long-term impact on Bitcoin’s bullish trajectory, as rising budget deficits under either administration are likely to support safe-haven assets like BTC and gold.
Risks Beyond the Election
While the election poses immediate volatility, Hayes views escalating conflicts in the Middle East or Ukraine as significant threats. “War is un-investable in the short term,” Hayes warns, advising low leverage and position sizing to navigate such risks. Despite these concerns, Hayes believes inflationary pressures from global conflicts will ultimately favor crypto, solidifying its role as a hedge against economic instability.
Arthur Hayes’ Maelstrom Fund Hedges U.S. Election Risk with USDe Stake
Leveraging USDe for Election Uncertainty
Hayes’ choice of USDe allows the fund to stay invested in a delta-neutral product during uncertain times. USDe maintains its $1 peg using a hedged cash-and-carry strategy on BTC and ETH futures, generating yield through funding fees from short positions. According to Hayes, the fund will shift back to crypto once the election results are clear and the losing side accepts the outcome.
Market Impact of Election Results
Hayes foresees potential unrest if the losing party disputes the results, likely causing short-term volatility for risk assets like cryptocurrencies. However, in the absence of unrest, Hayes expects the markets to rally post-election. Despite uncertainties, Hayes sees limited long-term impact on Bitcoin’s bullish trajectory, as rising budget deficits under either administration are likely to support safe-haven assets like BTC and gold.
Risks Beyond the Election
While the election poses immediate volatility, Hayes views escalating conflicts in the Middle East or Ukraine as significant threats. “War is un-investable in the short term,” Hayes warns, advising low leverage and position sizing to navigate such risks. Despite these concerns, Hayes believes inflationary pressures from global conflicts will ultimately favor crypto, solidifying its role as a hedge against economic instability.