AI Boom Fuels Risk of Credit Crisis, Predicts BTC Surge to $1 Million

Arthur Hayes, co-founder of BitMEX, believes that the debt-fueled artificial intelligence infrastructure boom could lead to a credit crisis similar to the one in 2008. In his latest blog post, he argues that investors have mistakenly treated spending on data centers and power infrastructure as high-growth technology investments rather than leveraged real estate.

Hayes expects lenders to finance excessive construction before a slowdown in AI capital expenditure exposes weaker borrowers. He describes the AI boom as a 'credit story like 2008, not an earnings story like 2000.'

The scale of commitments underpinning the AI boom is already visible, with Microsoft, Meta, Oracle, Amazon, and Alphabet having committed about $1.09 trillion to leases that have not yet commenced, primarily for data centers.

Hayes believes that this could lead to a government liquidity response, which in turn could drive Bitcoin (BTC) to $1 million or higher. He also predicts that Ether (ETH) will reach $5,000 by year-end and plans to build a significant position while selling out-of-the-money ETH put options.