Arthur Hayes, the chief investment officer at digital asset investment fund Maelstrom and co-founder of BitMEX, is taking precautions ahead of the U.S. election to hedge against uncertainty in the markets. Hayes revealed that Maelstrom has allocated 5% of its funds in staked USDe, a stablecoin offered by Ethena Lab, which is earning a return of approximately 13%. This move is aimed at protecting the fund from potential market volatility leading up to and following the election.
In addition to staked USDe, Maelstrom continues to maintain significant bullish positions in cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and other tokens. The fund’s strategy involves rotating the staked USDe back into crypto assets once the election results are clear and the losing side accepts defeat. Hayes emphasized that in the short term, the outcome of the election will not have a significant impact on the fund’s strategy.
Ethena’s USDe stablecoin operates as a synthetic dollar, utilizing collateralized stablecoins and a hedged cash-and-carry arbitrage strategy to maintain a peg to the US dollar. By staking USDe and acquiring staked USDe (sUSDe), investors can earn rewards and gain access to protocol incentives. This innovative approach is part of Maelstrom’s risk management strategy to navigate the current market uncertainties.
Hayes also pointed out that the potential for social unrest following the election could lead to increased price turbulence in risk assets, including cryptocurrencies. However, he remains optimistic about the long-term prospects of Bitcoin and other digital assets, regardless of the election outcome. The prevailing macroeconomic conditions, such as rising budget deficits and inflationary pressures, are expected to drive continued interest in safe-haven assets like Bitcoin.
Looking ahead, Hayes highlighted the importance of monitoring geopolitical risks, such as potential military conflicts in regions like the Middle East or Ukraine, which could impact global markets in the short term. Despite these risks, Hayes believes that maintaining a balanced portfolio and avoiding excessive leverage are key elements in navigating uncertain market conditions.
In conclusion, Arthur Hayes’ strategic approach to managing Maelstrom’s investment portfolio underscores the importance of diversification and risk management in the volatile world of cryptocurrencies. By hedging against election uncertainty with staked USDe and maintaining bullish bets in leading digital assets, Maelstrom aims to navigate the current market landscape while positioning itself for long-term growth and stability.
