Arthur Hayes, the BitMEX co-founder and Maelstrom chief investment officer, has a new theory for why Bitcoin (BTC) hasn't performed as expected. In his view, the answer lies in the surge of artificial intelligence (AI) spending, which has drained liquidity from the market. Hayes estimates that $1.5 trillion in AI-related debt was issued between 2022 and 2026, with the majority of it coming from 2025. This debt financed the buildout of AI, leaving little liquidity for Bitcoin to absorb. Hayes revisits his liquidity thesis, questioning why Bitcoin didn't perform as his models predicted, despite the creation of more money. He concludes that the money went to AI instead. Hayes now predicts a bearish outlook for nearly every risk asset, except large energy producers, which could drag Bitcoin down in a broad selloff. He points to upcoming mega-IPOs, including SpaceX, Anthropic, and OpenAI, as potential triggers for this selloff. However, he sees a silver lining for Bitcoin if the AI bubble bursts. In that scenario, central banks may return to money-printing, and investors may seek new destinations for their capital. Hayes believes Bitcoin is well-positioned to be that destination, especially in an environment flooded with freshly printed money. While the near-term outlook is bearish, Hayes sees a potential upside for Bitcoin if the AI bubble bursts, which could lead to a surge in liquidity and a rally in the cryptocurrency market.
