Interview with Arthur Hayes: AI Has Drained Market Liquidity; BTC Will Be Below $100,000 by Year-End

2026.06.17

Interview with Arthur Hayes: AI Has Drained Market Liquidity; BTC Will Be Below $100,000 by Year-End

Arthur Hayes liquidated all his crypto positions and shifted to U.S. Treasury bonds and energy stocks. His core thesis is: the Iran war will drive up oil prices → Trump, aiming to retain control of the House of Representatives, will pivot to anti-AI populist rhetoric → the AI bubble has peaked and will drag down the crypto market, leading to a bearish outlook for Bitcoin below $100,000 by year-end.

2026.06.17 - 06:17:24

比特币AI

Navigating Web3 tides with focused insights

Compiled & Translated by TechFlow

Guest: Arthur Hayes, Co-Founder of BitMEX

Host: Kyle Chasse, CEO of Master Ventures

Podcast Source: Kyle Chasse Crypto

Original Title: Arthur Hayes: Bitcoin's Final Dump Before The Pump

Air Date: June 10, 2026

Key Takeaways

Arthur Hayes liquidated his largest crypto positions—HYPE, NEAR, Worldcoin, and Zcash—not due to issues intrinsic to crypto itself, but based on a macro-level chain of reasoning spanning oil prices, the Iran war, Trump’s midterm election strategy, and the impending collapse of the AI bubble. He believes Trump may reverse course and attack the AI industry to recover from electoral deficits in the midterms; once the AI bubble peaks, the crypto market cannot remain unscathed. In his view, SpaceX’s IPO—at a $1.8 trillion valuation and a 100x price-to-sales ratio—is a liquidity time bomb waiting to detonate.

Highlights of Key Insights

Why He Liquidated Everything

"Voters dislike high oil prices and energy-driven inflation."
"The higher the oil price, the more eager everyone is to negotiate—but as soon as oil prices fall, suddenly no one wants to reach an agreement."

Trump’s Pivot Against AI

"If he wants to pull a rabbit out of a hat, the only issue he can flip is AI—temporarily taking up the Democratic microphone to declare he’ll protect Americans from AI harms, causing people to forget that Republicans funded it all in the first place."
"What would be most devastating to the AI narrative is taxation and regulation."

New Portfolio Allocation

"Most of my liquid assets are in U.S. Treasuries and energy stocks."
"I’m not saying AI won’t continue growing—I’m saying the market’s willingness to pay forward multiples for that growth will decline, so asset prices will fall."

The Math Behind the AI Capex Bubble

"I trade based on gut feel and intuition—not rigorous analysis. I sense we’re in some phase of the AI bubble, though I’m unsure exactly which phase."
"You simply cannot justify paying a 100x sales multiple for SpaceX—or any AI company—when both earnings and capital expenditures are decelerating. What matters is how fast growth is accelerating—or decelerating—and your perception of that acceleration rate."
"When you invest in AI, you’re not investing in earnings—you’re investing in data center capex. You’re betting on the second derivative—the acceleration or deceleration of a trend. If the trend is accelerating, you’ll pay infinite multiples for future revenue; if it’s decelerating, you won’t."
"We’ve already reached $800 billion in AI capex for 2026. By 2027, that second derivative will begin slowing—you cannot sustain a 100x sales multiple for SpaceX or any AI company when both earnings and spending are decelerating."
"There will always be conflict between capital and labor—whether voluntary or forced—and at some point, an agreement must be reached."

Why Bitcoin Has Underperformed AI

"Since ChatGPT’s commercialization, U.S. M2 has increased by roughly $1.5 trillion—but AI and AI-related companies have issued about $1.5 trillion in debt during the same period, with $1.3 trillion concentrated between 2025 and 2026. AI has absorbed all excess liquidity."
"When bubbles burst, correlations go to 1—AI falls, Bitcoin falls, everything falls together—until the dust settles and certain specific assets begin outperforming again."
"Over the next six months, a major correction in the AI complex is inevitable, driven by rising oil prices and U.S. political factors—and Bitcoin won’t be spared."

The SpaceX IPO Trap

"The market doesn’t just expect normal trading—it expects an IPO to surge 50%, delivering an absurdly outsized gain, signaling that the market still believes in AI, picked the right star company, and expects it to keep soaring."
"At around a $1.8 trillion IPO valuation, SpaceX would instantly become the world’s seventh-largest company. Its trading valuation approaches a 100x price-to-sales ratio. This is utterly absurd—it would rank seventh globally despite having proven nothing."
"This follows a classic crypto scam pattern: low float, high fully diluted valuation, 4–5% circulating supply now—rising to nearly 25% by September—with insiders continuously dumping shares on you from July through October."

Evidence Supporting an Anti-AI Strategy

"I asked Perplexity AI to search every highly competitive congressional district for local legislation restricting data center construction or expressing opposition. The result? If Trump pivots anti-AI, he could flip enough seats to retain the House."
"Trump has no ideology—he only cares about winning. In 2020, he mailed checks to every American—the purest form of direct money printing. So don’t assume he won’t embrace naked populism."

The Fed, Worshe, and Rate Risk

"Oil prices are higher—and won’t drop anytime soon. The two-year Treasury yield currently sits about 60 basis points above the effective federal funds rate. Markets are telling the Fed: ‘You need to hike.’"
"Bubbles fear rising rates most—higher funding costs inevitably push investors out of this casino, in one form or another."
"I currently see no room for Worshe to cut rates. If rate-cut expectations underpin your optimism about AI’s bubble and its sustainability, then you should seriously question that assumption."

Crypto Catalysts and Re-entry Timing

"I genuinely don’t see many signs of money printing—and even if there were, it flows straight into AI infrastructure."
"If we return to that perfect economic sweet spot—high growth, low inflation—what do you buy? Do you buy Nvidia or Bitcoin? You’d unquestionably pick Nvidia—or Samsung, right? Because they’ve surged 50x in two years. Would you buy Bitcoin? Of course not."
"That’s precisely when crypto can outperform—once AI has suffered a credibility crisis. Not that AI ceases to exist, but its explosive growth slows—and investors seek alternative trades. I hope that alternative is crypto, drawing liquidity back into the space."

Quick-Fire Q&A

"Will Bitcoin be above or below $100,000 by year-end? — Below."
"If you had $1 million to invest today—in Bitcoin, HYPE, short-term Treasuries, or gold—which would you choose? — ExxonMobil."

Why He Liquidated Everything

Host Kyle Chasse: Arthur, welcome back. Recently you sold Zcash, HYPE, and NEAR—everyone’s accusing you of bailing out of scams or dumping after pumping. Why did you sell everything? What’s really going on?

Arthur Hayes:

I just published an article titled “Reality Check”—about 5,000 words—laying out the argument I’ll summarize in just a few minutes on this podcast. If you want deeper insight into my reasoning, I strongly recommend reading it on my Substack. At its core, however, the thesis hinges on a reflexive interaction between oil prices and Trump’s midterm campaign rhetoric—he needs help to ensure Republicans defeat Democrats in November and retain control of both chambers of Congress. The problem is the ongoing Iran war—whether you like it or not, it’s here, now.

So Trump and the Iranian Revolutionary Guard must reach some kind of agreement to end this conflict. Both sides face a real constraint: oil prices determine how angry various regions of the world are at each party. Trump must worry domestically—voters dislike high oil prices and energy-driven inflation. Iran faces pressure from China and other developing nations: “What are you doing? We need this oil, these goods passing through the Strait of Hormuz. Yes, the U.S. attacked you—but figure it out.” So the higher oil prices climb, the more eager everyone is to negotiate—but as soon as oil prices fall, suddenly no one wants to reach an agreement. And so we oscillate back and forth in this tug-of-war—now for about three months, or as long as the war has lasted.

As this process continues, we’re actually depleting commercial and national reserves of oil and other hydrocarbons. Pick any energy analyst—their charts differ, but their conclusions align: pre-war inventories were ample, leading markets to believe oil and gas supplies were abundant and therefore relatively cheap. But we’re now consuming those surpluses at an ever-accelerating pace. We’ll hit a threshold—no one knows exactly how many billions of barrels, each analyst has their own number and timeline. Once we cross that date, things will turn very, very bad—very quickly. And the only way to rebalance markets is to sharply push oil prices upward.

That’s the worst-case scenario—Trump and the IRGC fail to reach an agreement. By October, the Strait of Hormuz remains effectively closed, with only 25–30% of normal throughput—and that’s far from enough. A more likely outcome is that some agreement emerges in a month or two, restoring partial shipping access. But then everyone must rebuild inventories—you must replenish national strategic reserves, and you’ll stockpile even more than before—because you’ve just experienced firsthand being entirely at the mercy of Trump and a group of Iranian generals who decide whether your country receives essential goods. So you think: “I’ll stockpile more oil, more natural gas, more helium—everything needed to run a modern economy.” That creates additional demand—not necessarily pushing prices to catastrophic levels, but certainly meaning oil, gas, and other commodity prices will be higher in three or four months than they are today.

The Link Between Oil, War, and Elections

Arthur Hayes:

Following this logic further, Trump and his Republican allies face near-certain losses in the 2026 midterm elections—especially in the House of Representatives. Check Polymarket right now: the odds of Democrats reclaiming control of the House have surged to 82%.

Why? Clearly, Trump is getting crushed on cost-of-living issues. People perceive inflation as terrible—and worsening. To voters, Republicans hold the White House, and this awful conflict was instigated by them—so naturally, the GOP gets blamed. That’s why people think they’ll lose—and lose badly.

The problem is, there’s little you can do on inflation—policy lags are long, and supply chains are only now digesting events from three or four months ago. I don’t think Trump can shift the inflation narrative much. People see and feel it at the gas pump—Trump has no Jedi mind trick to convince them inflation isn’t real—it is real, and they see it every other day at the pump. So what issue could shake up the entire U.S. political spectrum? Answer: AI data centers—regulation, taxation, all of it. I believe Democrats are landing on a brilliant campaign message: halt new data centers, tax AI giants, regulate AI. It’s not just low-income workers who fear job loss—wealthy professionals do too, at least that’s the prevailing fear.

Trump’s Pivot Against AI

Arthur Hayes:

If the opposition can harness that fear, it gains two powerful messages: one, Republican-instigated war caused destructive inflation; two, AI construction booms were effectively endorsed by Republican politicians. So my theory is—if Trump wants to pull a rabbit out of a hat, the only issue he can flip is AI. He picks up the Democratic mic and says: “We’ll impose stricter reviews on data centers—we’ll launch an AI National Dividend and tax them.” That’s Trumpian rhetoric—he can say anything; whether he acts on it post-November is another matter. I believe this is their only viable path to victory—to position themselves as the party protecting Americans from AI harms, letting Americans forget that Republicans financed it all in the first place—because people are forgetful. So I see this as the primary risk.

And Trump’s willingness to attack AI depends purely on oil prices—which in turn reflect the reflexive relationship between him and the IRGC. The longer this war drags on without resolution, the more commodity-price pressure builds for the future—and the more likely Trump is to target AI to win the election, or at least save the House for Republicans. Clearly, taxation and regulation would be most devastating to the AI narrative. We’ve already seen it in Korea—a Korean politician declared support for a national AI tax, and Cosmos crashed that day. So I believe if such rhetoric begins appearing publicly—especially from Trump himself—you’ll see the AI bubble peak, at least over the coming months until the election—and drag crypto down with it. That’s the core thesis. Honestly, I didn’t want to think about this anymore—so last week, I liquidated my entire portfolio.

New Portfolio Allocation

Host Kyle Chasse: Where are most of your liquid assets now—cash or Treasuries?

Arthur Hayes:

Treasuries and energy stocks.

Host Kyle Chasse: You still believe energy will hold up if the AI bubble bursts?

Arthur Hayes:

We still need oil—that’s independent of personal preference. People need oil—it powers civilization. And I’m not saying AI won’t keep growing—the issue is the market’s willingness to pay forward multiples for that growth will decline, so asset prices will fall. That doesn’t mean these companies’ earnings won’t be strong—just that they won’t be as strong as expected, prompting us to sell. That’s the logic.

The Math Behind the AI Capex Bubble

Arthur Hayes:

I trade on gut feel and intuition—not deep analysis. I sense we’re in some phase of the AI bubble—I’m just not sure which. Over the weekend, I listened to Marco Papovich’s podcast—he’s BCA’s strategist, runs a great YouTube channel called Geopolitical Cousins—I highly recommend subscribing. He makes an important point both on the podcast and in his articles: When you invest in AI, you’re not investing in earnings—you’re investing in data center capex. I often forget this myself: You’re betting on the second derivative—the acceleration or deceleration of a trend. If the trend is accelerating, you’ll pay infinite multiples for future revenue; if it’s decelerating, you won’t—and the asset won’t rise as fast as you need it to.

He recently published a chart showing the second derivative of capex growth—the larger the number, the harder acceleration becomes. We’re already at $800 billion in AI capex for 2026; he forecasts the second derivative will begin slowing in 2027. You simply cannot justify paying a 100x sales multiple for SpaceX—or any AI company—when both earnings and capex are decelerating. Even if revenues keep growing, that’s not the point—the point is how fast growth is accelerating or decelerating, and your perception of that rate. Mathematically, via the law of large numbers, capex growth simply cannot sustain the pace seen from 2023 to 2026—it’s physically impossible. So when will markets discount that future reality—shifting to “I no longer want to pay 50x, 60x, or 70x P/E for these AI stocks or supply-chain firms”? When will markets recognize that opposition parties worldwide are leveraging this zeitgeist—“Damn data-center inflation, damn AI replacing my job”? Why are only Elon, Sam Altman, Zuckerberg, and maybe fifteen others becoming trillionaires—privatizing humanity’s collective knowledge—while what’s mine? This isn’t uniquely American—people everywhere ask the same question: If AI is trained on human interaction data—using all that public and private data, legally and illegally—why should they monopolize the profits? For those wealthy enough to participate in equity stories, it’s a legitimate question.

Eventually, markets will sense a backlash. Conflict between capital and labor is inevitable—voluntary or forced—and at some point, an agreement must be reached. If you hold those assets when that happens, you’ll usually get crushed. These thoughts kept circling in my head—so I sat down, tried to make sense of what was happening—and spent one morning liquidating everything.

Why Bitcoin Has Underperformed AI

Host Kyle Chasse: How do you see markets moving between now and year-end?

Arthur Hayes:

To answer that, I’ve been asking myself another question: Why hasn’t Bitcoin risen higher since November 2022? I’ve repeated this on your show and many others: It’s all about liquidity. More liquidity should lift Bitcoin. Yet clearly, that’s wrong—because while Bitcoin rose modestly since ChatGPT’s commercialization, Nvidia and all those AI stocks soared far higher. When did Bitcoin top? Last October—at $125,000. So where did all the liquidity created during this period—my models suggest trillions—go? Why didn’t Bitcoin hit $500,000 or $1 million? Why did it underperform AI?

I usually don’t track where money flows—I just say “more money means Bitcoin rises,” a lazy heuristic that worked before, but fails now. So I revisited my mental model: What did I miss? Answer: We all believe AI may be among history’s most transformative technologies—and massive capex is underway, at a trillion-dollar scale. But how much debt has AI consumed during this time? Did AI effectively crowd out all other risk assets—hoovering up excess liquidity first?

At a high level, I avoid M2—it’s too crude—but let’s use it for illustration. Since ChatGPT’s launch, U.S. M2 rose by at least $1.5 trillion. Then I asked reliable Perplexity AI: How much debt was issued to AI and AI-related companies? Estimate: ~$1.5 trillion—with $1.3 trillion issued between 2025 and 2026. So while the AI frenzy ignited in late 2022, the capital markets’ debt engine only truly revved up recently—late-stage and intense.

My theory: Bitcoin rebounded from lows because substantial liquidity was indeed created—and AI hadn’t yet absorbed much of it pre-2025, giving Bitcoin clear skies to ride that wave. From 2022 through mid-2025, falling reverse repos and other factors favored Bitcoin. But AI capex and loan charts show real acceleration only in 2025—especially 2026. And that’s precisely when Bitcoin struggled—topping last October, then falling 50–60%. So if all liquidity flows to AI—and shows no sign of stopping—then an AI bubble correction won’t flood Bitcoin with fresh capital. Investors will dump AI—and dump Bitcoin—and dump everything. When bubbles burst, correlations go to 1—everything falls together—until dust settles, then specific assets begin outperforming.

Therefore, if I believe a major AI complex correction is imminent over the next six months—driven by rising oil prices and U.S. politics—Bitcoin won’t escape. It should perform better post-correction—but you must endure the decline first. That’s why I see no favorable environment for Bitcoin or crypto right now. And yes, my positions in NEAR, HYPE, Worldcoin, and Zcash performed brilliantly—I sold profitably. I’m pocketing those gains and stepping aside to watch. These assets may keep rising—but in my mental model, current risks—foreseeable unknowns and their potential evolution—make me deeply uncomfortable holding them. That’s why I exited.

The SpaceX IPO Trap

Host Kyle Chasse: Another thing I’ve been thinking about—the S&P 500 is rising, yet most individual stocks are falling, dragged upward by a handful of tech names. More importantly, we’re facing IPOs from OpenAI, Anthropic, and SpaceX—potentially adding over $4 trillion in new market cap. Could these drain liquidity for a while? How do you see these IPOs playing out?

Arthur Hayes:

I think these will struggle to perform well—because market expectations aren’t for normal trading. Markets expect IPOs to surge 50%, delivering an absurdly outsized gain—proving the market still believes in AI, chose the right star company, and expects it to keep soaring. At a ~$1.8 trillion IPO valuation, SpaceX instantly becomes the world’s seventh-largest company. To rise another 50%, it would need to surpass Amazon. Read its S-1 filing—you’ll find SpaceX’s trading valuation approaches a 100x price-to-sales ratio. This is utterly absurd—it would rank seventh globally despite having proven nothing.

Yes, it’s a brilliant idea—space-based data centers, policy constraints on terrestrial ones—I agree that logic holds. I follow Semi Analysis’ Substack—they do deep semiconductor and AI research. They published a piece comparing full costs of space vs. ground data centers—conclusion: operating data centers in space currently costs four times more than on land. Beyond that, you lack sufficient chips for Elon’s vision—and terrestrial capacity remains. Building on land may not be as easy as hoped—but it’s four times cheaper, so you’ll build there until you absolutely can’t. Optimistic estimates suggest space data centers won’t reach true cost parity with terrestrial ones until sometime within the next decade.

So the absurd reality is: global capital willingly pays a 100x price-to-sales ratio for a product that costs four times more than competitors—and rockets explode—and won’t generate real cash flow for a decade.

Worse still, this mirrors a classic crypto scam pattern: low float, high fully diluted valuation junk coins. With only 4–5% circulating supply now—rising to ~25% by September—and insiders dumping shares on you from July through October—yet trading as the world’s seventh-largest company, having proven nothing on this data-center thesis. Satellite internet? Yes, that’s excellent—but that’s not why you’re buying SpaceX.

So I think this struggles to meet market expectations. I’m not saying it’ll crash—but even a 10% gain triggers market disappointment: “That’s not good enough—I expected 50%, 60%, or 70%.” That makes investors question: While SpaceX insiders increasingly dump shares, should I really compete for Anthropic or OpenAI’s September IPOs?

Setting the price so high creates near-impossible expectations. If it were a $100 billion company, doubling or tripling would signal AI’s validity—SpaceX’s surge would reflect smart, lower-market-cap issuance. But this is maximum extraction—$1.8 trillion. To outperform Nvidia? Extremely difficult. Sorry, Elon—you won’t beat Jensen. I don’t know Amazon’s current CEO—but you won’t beat those firms either. They have real revenue, operations, and proven business models. SpaceX’s entire thesis remains largely scribbled on a napkin. Time may prove it—but can you really push a $1.8 trillion stock up another 50%? It’s extraordinarily hard. That’s why I believe this event will severely undermine faith in the AI narrative—simply because its scale makes upside nearly impossible.

Host Kyle Chasse: How will liquidity flow during these IPOs? Will it massively shift capital—or will it be “who sells first, wins,” à la Elon?

Arthur Hayes:

It’ll be the former. People will get excited—and pull liquidity from other assets. If SpaceX disappoints, Anthropic and OpenAI will face immense pressure to lower pricing—and if these AI giants are forced to slash valuations or shrink fundraising pre-IPO, that sets a catastrophically damaging precedent—effectively self-inflicted soft confirmation that the AI bubble is overinflated, and they’re voluntarily lowering future expectations. Suddenly, expectations reset—and investors wonder: Why did they cut prices post-SpaceX? Why shrink the offering? All these shifts could cool investor enthusiasm. So it may involve pulling capital from elsewhere—or simply cooling off from the AI bull story, gradually exiting—and triggering a cascade of price declines.

Evidence Supporting an Anti-AI Strategy

Host Kyle Chasse: Let’s revisit Trump’s anti-AI narrative—some might argue AI titans helped elect him, or at least influenced him significantly. We know he hosted multiple private dinners and discussions with them—they’re his major donors and financiers—and he’s consistently voiced public support for AI.

I haven’t counted how many people openly oppose AI—I know most hold no warm, fuzzy affection for it—so this pivot could indeed be quite clever. But no one else has proposed it—it’s a bold forecast. How confident are you? Any signals suggesting he’ll take this path?

Arthur Hayes:

I used Perplexity AI again—I asked: “Polymarket says Republicans will lose—any path to victory?” First, grasp the underlying political logic: Why does Trump desperately need to retain the House in the midterms? It’s not about lofty ideology—it’s pure political self-preservation. If Democrats seize the House, Trump and his family face mountains of congressional subpoenas for the next two years. Democrats could relentlessly pursue him—leaving zero room to build any meaningful “Trump second-term” legacy. That’s why he must win.

I also believe Trump has no ideology—he only cares about winning. During the pandemic, he delivered the largest fiscal transfer to the American public since the New Deal—direct checks, no income thresholds, rampant fraud, rich and poor alike received payments. So don’t assume he won’t embrace naked populism—directly appealing to public sentiment, which is decidedly anti-AI. AI stirs negative emotions across both Republican and Democratic voters. So I asked AI: “Assuming seat projections are correct, remove districts made safe by redistricting—but even then, they still need additional seats to retain the House.”

Then I asked: “In all competitive, margin-of-error districts, are there local bans or restrictions on data center construction? Search all such districts.” Result: If Trump pivots anti-AI, he flips enough seats to win the House—because these districts have already demonstrated bipartisan local resistance: residents don’t want data centers built near them—and have taken local action.

And again—this is just rhetoric. Trump literally needs to do nothing. He could call Jensen and AI titans: “Listen—I’ll hammer you hard over the next four months. Don’t panic. Nothing happens post-November.” That’s exactly how he operates. He attacks—stocks fall—some lose money. Look at his tariff playbook—his hedge fund friends lost billions trying to navigate his attempts to rewrite U.S. trade infrastructure. He pulled back at the last moment—but proved he’s willing to try.

So if his political strategists see anti-AI rhetoric delivers votes—even just verbally—I see no reason he’d hesitate. The sole victims are stock markets—and the losers are merely wealthy people. You don’t even need to act—you’re just speaking, no bill passes. Post-November, it’s back to “We must win the AI race against China.” So in an inflation narrative already locked in and unchangeable, this is a viable path for Republicans to win. I don’t care if oil drops 50%—gas prices may dip slightly—but too many supply-chain items are already en route—by October, grocery shelves will be pricier—and Trump is virtually powerless.

The Fed, Worshe, and Rate Risk

Host Kyle Chasse: Let’s talk about Worshe. I know certainty is limited—he won’t hold his first FOMC meeting until next week. Based on his prior statements and the approaching midterms, what’s your read on his policy stance?

Arthur Hayes:

I don’t recall his latest speech verbatim—but one narrative floats: “See through wartime commodity inflation, trust the AI productivity miracle to deliver non-inflationary growth—and thus cut rates.” That’s the Worshe narrative markets love. The unfortunate reality? Oil prices are higher—and won’t fall soon. The two-year Treasury yield currently sits ~60 bps above the effective federal funds rate. Markets tell the Fed: “You need to hike.” That’s the signal markets send—whether the Fed acts, I don’t know.

I also think Trump may privately temper his obsession with rate cuts—because if he wants to address cost-of-living burdens, the worst thing he could do is urge the Fed to cut rates amid 3.5–4% inflation. If he truly cares about winning voters on affordability, rate cuts would guarantee his midterm defeat. So given market positioning, I judge Worshe’s path to cutting rates extremely difficult. My base case is no change—only the wording matters: Is it hawkish pause or dovish pause? A hawkish pause implies mounting inflation pressure—and potential future Fed action—markets will discount: “They’ll hike at some point.” And bubbles fear rising rates most—higher funding costs inevitably drive people out of this casino.

So I see Worshe cutting rates as extremely unlikely—most probable is a hold, followed by wording-dependent interpretation. The Fed has few paths to support the bubble—oil has already pushed two-year yields above the effective funds rate—oil spikes and widening spreads push yields ever higher. Currently, I see no room for Worshe to cut. If rate-cut expectations anchor your optimism about AI’s bubble and its sustainability—you must rigorously question that assumption.

Crypto Catalysts and Re-entry Timing

Host Kyle Chasse: Between now and the midterms, could any event offer markets short-term breathing room or relief? Not market manipulation—but any narrative or unfolding development that might spark a rebound from now through year-end?

Arthur Hayes:

Maybe people believe MicroStrategy will somehow keep pumping—and reignite bullish sentiment—but I genuinely see few signs of money printing—and even if it occurs, it flows straight into AI infrastructure. So I see no massive positive catalyst to lift crypto from this slump—or at least allow it to outperform AI. Because if we return to that perfect economic sweet spot—high growth, low inflation—what do you buy? Nvidia or Bitcoin? You’d unquestionably pick Nvidia—or Samsung, right? Because they’ve surged 50x in two years. Would you buy Bitcoin? Of course not. That’s the problem—AI’s performance has been too strong. If conditions stay identical—and these assets keep excelling—why choose crypto? You’ll keep betting on capex growing perpetually at 100% annually—and keep buying these firms. Is that sustainable?

That’s precisely today’s market belief. But if I were an institutional investor and clients asked, “Nasdaq rose 50%—why did you only rise 10%?”—and I replied, “I hedged with volatility products”—they’d say, “Why give money to a fund up only 10%, versus one up 50%?” That’s the logic consuming everyone—“Maximize returns—why aren’t you participating?” That’s the problem.

Host Kyle Chasse: When would you consider re-entering? What would convince you to come back?

Arthur Hayes:

If oil stays tame this fall—no sharp spike—and Trump doesn’t turn on AI titans—I may re-enter to explore value. But all of this rests on an extremely strict prerequisite: Over the coming months, the epic IPOs of SpaceX, Anthropic, and OpenAI must open spectacularly—even shatter all historical records for magnitude and upside—to match the largest IPO issuance in human history. When reality diverges from expectation—that’s when trouble starts.

Host Kyle Chasse: How can we gauge when crypto might enter its next bull cycle?

Arthur Hayes:

We need more money printing—and crucially, that money must not flow entirely into AI. When will that happen? I don’t know—but I don’t think it’s happening now. As you’ve often said, governments’ only way out of self-inflicted crises is money printing—it’s inevitable. Can we gauge the timeline—or identify the catalyst? If the AI bubble truly bursts—financial institutions fail—bailouts will follow. When? I don’t know. But that’s when crypto can outperform—once AI suffers a credibility crisis. Not that AI vanishes—but its explosive growth slows—and investors seek alternatives. I hope that alternative is crypto—and liquidity flows back accordingly.

I absolutely believe the answer is always money printing—the only question is timing. Bitcoin has been humanity’s best-performing asset over the past 15 years. Unfortunately, many didn’t enter at one cent—they bought at other prices. If you entered during the ETF era, you’re likely down on average. Everything depends on path dependency—and your entry timing. Just because you bought six months ago doesn’t mean Bitcoin owes you gains. I think that’s a harsh lesson many need to learn.

Quick-Fire Q&A

Host Kyle Chasse: A few final rapid-fire questions. First: Will Bitcoin be above or below $100,000 by year-end?

Arthur Hayes:

Below.

Host Kyle Chasse: When will the altcoin season arrive?

Arthur Hayes:

We’ve just lived through one—featuring just four assets. People made big money on HYPE and others—so I think it’s just ended. Maybe it returns—but I don’t know.

Host Kyle Chasse: Will you buy back HYPE before year-end?