AI Boom Predicted as Credit Bubble, Bitcoin to Hit $1 Million

Arthur Hayes predicts that Bitcoin will eventually hit $1 million as he believes the current AI boom is a credit bubble. He expects the bubble to burst in 2027-2028, sending a wave of liquidity into financial markets and fueling a parabolic rally in Bitcoin.

Hayes, co-founder of BitMEX, argues that lenders are treating data centers and power plants as financing opportunities similar to lending to Apple. However, he believes this is analogous to lending to Lehman Brothers before the 2008 global financial crisis.

The AI boom's credit bubble will burst when data center construction growth slows or hyperscaler forward guidance decelerates, putting pressure on over-leveraged holders of AI-related debt. Hayes estimates that moderation in announced capital expenditure buildout will start to moderate by mid-to-late 2027 and become evident by 2028.

He predicts that China and the United States will eventually step in to bail out over-leveraged AI companies, injecting trillions of dollars into financial markets. In the short term, Hayes expects Bitcoin to consolidate in the range of $60,000 to $70,000 before hitting a bottom.