Arthur Hayes believes that a powerful bull market for cryptocurrencies is possible despite fears related to encryption and artificial intelligence. In his view, the resumption of money printing could boost digital assets. He compares the current anxiety to obstacles that have arisen in previous market cycles. Hayes is the Chief Investment Officer of the crypto investment firm Maelstrom and co-founder of the crypto derivatives exchange BitMEX. He outlined his arguments on X on October 8.
Hayes compared the current anxiety around AI to the debate over Bitcoin's block size in 2017, the pandemic, and the aftermath of the FTX collapse amid rising rates. The 2017 debate was about how much transaction data a Bitcoin block should hold. He called the current anxiety FUD – an industry term for fear, uncertainty, and doubt.
The forecast relies on his earlier argument that government efforts to manage borrowing costs could support digital assets. In an essay dated August 24, Hayes argued that the expansion of dollar liquidity could flow into Bitcoin and other cryptocurrencies. His logic emphasizes financial conditions as a driver of investment demand.
Greater availability of money and credit underpins Hayes's expectations that policymakers' responses to financial pressure could lift prices. Global liquidity describes these conditions across the financial system. In his scenario, capital released through government intervention could reach speculative investments, including cryptocurrencies.
In the same August 24 essay, Hayes linked this to expanded Treasury bond buybacks, stating that buybacks support a new Bitcoin bull market. These debt management operations buy back outstanding government securities. He considered their impact on yields favorable for risk assets, distinguishing them from Federal Reserve asset purchases.
His AI crash scenario suggests larger intervention if heavily indebted infrastructure faces financial stress. In an interview published on October 2, Hayes suggested that an AI crash could trigger support worth trillions of dollars, potentially benefiting cryptocurrencies through money creation. He placed the estimate around 2027 or 2028, when data center obligations come due.
The October 8 post concluded with a bullish forecast, linking money creation to rising cryptocurrency prices: “Money shall be printed, bags shall pump.”
Concerns about AI security meet objections from experts
Concerns about security, which Hayes called FUD, have also drawn objections from specialists studying the underlying mathematical claims. Yehuda Lindell, head of cryptography at the crypto exchange Coinbase (Nasdaq: COIN), challenged the inevitability of an AI breakthrough, stating that there is no evidence of a breach of established cryptographic assumptions. His objection pertains to the technical premise of the anxiety that Hayes included in his bullish analogy.
This material is prepared solely for informational purposes and does not constitute financial advice or a recommendation.
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