BitMEX co-founder Arthur Hayes revised his Bitcoin liquidity thesis after BTC fell approximately 50% from near $125,000 in October last year despite continued money creation. Hayes attributes Bitcoin's underperformance to the AI sector absorbing newly printed dollars, estimating roughly $1.5 trillion in AI-related debt was issued between 2022 and 2026. He concluded his original framework tracked fiat creation without examining where capital actually flowed, with 75% to 80% of AI debt coming from 2025 to finance hyperscaler expenditure and the broader AI buildout.
Hayes Identifies AI Debt Absorption as Key Factor
Speaking on a Cointelegraph podcast, Hayes said he revisited his framework after Bitcoin failed to perform as his liquidity thesis predicted. He noted Bitcoin traded near $125,000 in October last year and has since fallen roughly 50%, even though more money was created over that period. "What about my mental model is wrong?" he questioned, concluding that he had been tracking how much fiat was being created without examining where it actually went.
Hayes estimated that roughly $1.5 trillion in AI-related debt was issued between 2022 and 2026, with 75% to 80% of it coming from 2025. He said that money financed hyperscaler capital expenditure and the broader AI buildout, leaving little left over for Bitcoin to absorb. He argued that Bitcoin was able to rally off its FTX-era lows precisely because AI had not yet started vacuuming up liquidity, but that the dynamic reversed as AI spending and lending accelerated into 2025.
Bitcoin Funding AI Trades Discussion
When asked whether crypto holders were cashing out Bitcoin to fund AI trades ahead of a wave of major IPOs, Hayes said it's probably a bit of both. Some investors likely did sell crypto at the margins to chase AI. But the bigger story, he argued, is simpler: newly printed dollars went to AI and never made it to Bitcoin in the first place.
Hayes Bearish on Risk Assets Except Energy Producers
Hayes said he's now bearish on nearly every risk asset except large energy producers. He's watching three mega-IPOs in particular, including SpaceX, which went public last week, and Anthropic and OpenAI, reportedly set to list in September at multi-trillion-dollar valuations.
His concern is that investors will need to sell other holdings to free up cash for those listings, and Bitcoin could get dragged down with everything else in a broad, correlation-driven selloff.
Hayes Projects Bitcoin Recovery Scenario Post-AI Bubble
Despite the bearish near-term view, Hayes thinks the same setup eventually flips in Bitcoin's favor. If the AI bubble bursts, or even looks like it might, that kind of financial stress tends to force central banks back into money-printing mode. At that point, with investors no longer willing to pay 100 times sales for AI stocks, capital would need somewhere new to go. Hayes thinks Bitcoin is well-positioned to be that destination, especially in an environment flooded with freshly printed money.
Bitcoin's price was trading around $64,000, relatively flat over the past 24 hours at the time of the article's publication.
FAQ
What is Arthur Hayes' revised Bitcoin liquidity thesis?
Arthur Hayes revised his Bitcoin liquidity thesis to account for AI sector debt absorption. He estimates roughly $1.5 trillion in AI-related debt was issued between 2022 and 2026, with 75% to 80% coming from 2025, which financed hyperscaler capital expenditure and left little liquidity for Bitcoin to absorb.
Why did Bitcoin fall from $125,000 according to Hayes?
Hayes attributes Bitcoin's approximately 50% fall from near $125,000 in October last year to newly printed dollars flowing into AI sector debt rather than Bitcoin. He concluded his original framework tracked fiat creation without examining where capital actually went, missing the AI sector's liquidity absorption.
What IPOs is Arthur Hayes watching that could affect Bitcoin?
Hayes is watching three mega-IPOs: SpaceX, which went public last week, and Anthropic and OpenAI, reportedly set to list in September at multi-trillion-dollar valuations. He expressed concern that investors may sell Bitcoin and other holdings to free up cash for these listings.
