Arthur Hayes Predicts AI Bubble Burst Could Spur Bitcoin Bull Run

Huoxing Finance reports that on August 5, Arthur Hayes published a new article titled “Situationship,” suggesting that the AI bubble may eventually burst, but its aftermath could drive global liquidity expansion and serve as a catalyst for Bitcoin’s next bull market. Hayes argues that the key to determining whether AI constitutes a bubble lies in how investors define AI infrastructure investment. He notes that the market broadly treats tens of trillions of dollars in AI capital expenditures as “technology investment,” assigning high-growth valuations, yet its true nature is more akin to “real estate investment.” He explains that current AI infrastructure development is essentially constructing underlying assets such as data centers and power facilities to support computing capacity, rather than directly investing in technology companies like Apple. “Financial institutions, private credit funds, and governments may mistakenly believe that investing in AI data centers is equivalent to investing in tech giants, when in reality it is more similar to investing in highly leveraged infrastructure projects.” Hayes believes the core reason for the potential bursting of the AI bubble is not unfulfilled corporate profitability, but excessive credit expansion. He states that, with support from the U.S. and Chinese governments, financial intermediaries may overbuild data centers, power infrastructure, and related supply chains, ultimately creating credit cycle risks reminiscent of the 2008 financial crisis rather than the profit-valuation crisis seen in the 2000 dot-com bubble. Nevertheless, Hayes maintains that AI’s long-term value remains enormous. He points out that the computational resources operating within data centers will drive the development of “silicon-based life,” exerting a transformative impact on human civilization comparable to that of the railway era. Regarding market implications, Hayes anticipates that after the AI bubble bursts, governments and central banks may adopt more aggressive monetary easing measures—such as large-scale money printing—to repair the financial system, rekindling a risk-on asset cycle and ultimately benefiting Bitcoin. He states that the critical variable in the current AI cycle is whether capital markets have mispriced AI infrastructure, and this assessment will determine the future direction of markets.