Arthur Hayes, the co-founder of BitMEX and the chief investment officer of Maelstrom, has a new theory about why Bitcoin (BTC) hasn't been performing as expected. He believes that the recent sharp decline in BTC, despite the continued creation of money, can be attributed to the massive influx of funds into artificial intelligence (AI).
Hayes' liquidity thesis, which he revisited after the BTC price drop, suggests that the money created by central banks and governments has been directed towards AI-related debt, leaving little room for Bitcoin to absorb and drive its price higher. He estimates that between 2022 and 2026, approximately $1.5 trillion in AI-related debt was issued, with a significant portion coming from 2025. This debt financed the capital expenditure of hyperscalers and the broader AI buildout, effectively drying up liquidity for Bitcoin.
In his view, the AI industry has become a liquidity vacuum, sucking up the newly printed money and leaving Bitcoin to struggle. Hayes argues that the initial rally in BTC off the FTX-era lows was due to the lack of AI spending, but as AI spending and lending accelerated, the dynamic reversed, causing the recent decline.
The expert is now bearish on nearly every risk asset, except for large energy producers. He is closely monitoring three upcoming mega-IPOs: SpaceX, Anthropic, and OpenAI. Hayes worries that investors will need to sell other holdings to fund these listings, potentially triggering a broad selloff that could drag down Bitcoin along with other risk assets.
However, Hayes remains optimistic about Bitcoin's long-term prospects. He believes that if the AI bubble bursts, central banks will likely resort to money-printing, and Bitcoin could become a destination for the excess capital. In an environment flooded with freshly printed money, Bitcoin might be well-positioned to benefit from the financial stress caused by the AI bubble bursting.
Despite the near-term bearish outlook, Hayes' analysis highlights the complex interplay between AI, liquidity, and the broader financial markets. His insights offer a unique perspective on the potential impact of AI on the cryptocurrency space and the broader economy.
