Arthur Hayes on Tuesday laid out the case why Bitcoin (CRYPTO: BTC) cannot rally until the AI bubble pops, arguing that the latter absorbed liquidity that could have gone to cryptocurrencies. 

AI Borrowed Every Dollar That Was Created Since 2022

Hayes laid out the core math in his essay, saying that US M2 rose by $1.5 trillion between November 2022 and today.

Over the same period, AI companies issued roughly $1.5 trillion in debt to fund data center construction. 

The numbers match almost exactly, meaning AI absorbed every dollar of new liquidity before it could find its way into Bitcoin.

“Bitcoin never had a chance,” Hayes wrote. “The only reason Bitcoin rallied strongly off the November 2022 low is that the AI debt binge really kicked into gear starting in 2025.” 

Bitcoin peaked in October 2025 precisely as AI capital expenditure reached previously unimaginable heights.

Three Darts That Could Pop The AI Bubble

Hayes identified three catalysts that he believes will deflate AI stocks. First, rising oil prices from the Iran war directly compress AI model company margins since data centers run on electricity generated from natural gas. 

Second, SpaceX, Anthropic, and OpenAI are collectively raising more capital than all dot-com IPOs combined, and Hayes argues the float expansion between now and September virtually guarantees market disappointment. 

Third, Trump may adopt anti-AI rhetoric to win undecided voters ahead of November midterms, the same way a Korean politician’s similar comments sent the Kospi nearly limit down before the government walked it back.

“Can the AI complex continue to rip at $150 oil? Doubtful,” Hayes wrote. 

He now holds large positions in US energy producers as a direct hedge against rising hydrocarbon prices under both a deal and no-deal scenario with Iran.

Hayes Dumped Everything Except Bitcoin And Ether

Hayes sold HYPE, NEAR, WLD, and ZEC last week, explaining that when AI stocks fall rapidly, investors cannot buy crypto even if it outperforms on a relative basis. 

He kept Bitcoin and Ethereum (CRYPTO: ETH), arguing that once the AI bubble pops it will trigger a financial crisis that forces a large monetary expansion, which historically benefits Bitcoin.

“I am confident that Bitcoin will dump then pump,” Hayes stated. He plans to revisit markets in early September, leaving open the option to buy back at higher or lower levels after the dust settles.

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