Key Takeaways
- BitMEX founder Arthur Hayes has liquidated his entire altcoin portfolio, including positions in NEAR, Hyperliquid, and Worldcoin
- Hayes compares the current AI investment frenzy to a bubble set to burst around 2027-2028
- He cautions that Bitcoin will not serve as a safe haven when the AI sector collapses and will likely decline alongside other risk assets
- Hayes forecasts that central bank stimulus following an AI crash will ultimately propel Bitcoin to $1 million
- His current strategy involves holding only Bitcoin for the long term while parking cash in US Treasury Bills
Arthur Hayes, who founded the cryptocurrency exchange BitMEX, has completely liquidated his altcoin holdings and is sounding the alarm about how the ongoing artificial intelligence investment bubble could pull cryptocurrency markets down with it when it inevitably bursts.
Hayes shared these perspectives during a recent Bankless podcast episode and in another interview, outlining his thesis that the AI boom has siphoned capital away from cryptocurrency markets and that the reversal of this trend will inflict significant damage on digital assets.
Complete Altcoin Exit
Hayes revealed he has closed out his holdings in Near Protocol, Hyperliquid, and Worldcoin, along with other altcoin positions. He explained that the risk-reward calculus had shifted unfavorably.
He characterized his current strategy as being “permanently Bitcoin long,” while maintaining his cash reserves in US Treasury Bills to generate yield.
His withdrawal from AI-related cryptocurrency tokens is being interpreted by market participants as a bearish indicator. Both Near Protocol and Worldcoin occupy the intersection of artificial intelligence and blockchain technology, making his exit from these positions a signal that Hayes anticipates the entire AI-crypto narrative to collapse rather than simply shift.
He also mentioned that any fresh capital deployment would target Ethereum over Bitcoin, describing it as offering better value and more attractive positioning at present valuations.
The Coming AI Bubble Burst
Hayes drew parallels between today’s AI investment mania and the 19th-century railroad expansion. He argued that corporations are operating under faulty assumptions regarding chip longevity, projecting five to six-year lifespans for hardware that becomes obsolete within two years.
He anticipates this miscalculation will severely impact markets between 2027 and 2028, potentially triggering a credit crunch exceeding the scale of the 2008 financial crisis.
Hayes identified three critical vulnerabilities. First, escalating energy expenses undermine the profitability frameworks of AI enterprises. Second, United States regulatory policy could pivot abruptly against AI companies. Third, the anticipated initial public offerings from Anthropic and OpenAI will consume massive institutional capital, extracting liquidity from cryptocurrency and other speculative markets.
He argued that AI has essentially suffocated cryptocurrency investment. With AI stocks capable of delivering 20x returns within six months, investors have minimal incentive to allocate to Bitcoin.
Bitcoin Won’t Provide Protection
Despite maintaining long-term optimism about Bitcoin, Hayes cautioned it won’t remain insulated if the AI sector collapses. He predicted Bitcoin would be “thrown out with the bathwater” during a comprehensive risk-off movement.
His thesis suggests that central banks will respond to an AI market implosion with aggressive monetary expansion. This fresh liquidity, he contends, will ultimately channel into Bitcoin since it cannot be redeployed into a collapsed AI industry.
This represents the pathway through which he envisions Bitcoin climbing to $1 million. However, he emphasizes that reaching this destination requires navigating through a severe downturn first.
AI-themed assets have been capturing capital even within cryptocurrency markets. AI-connected BRC-20 NFTs recently generated $17.8 million in weekly trading volume, demonstrating how the AI investment theme has diverted attention and capital from layer-1 protocols and decentralized finance.
Hayes has stepped away from this investment thesis. Whether additional market participants will exit before the peak materializes remains uncertain.
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