AI Bubble Burst Could Trigger Crypto Rally, Says BitMEX Co-Founder
The co-founder of BitMEX, Arthur Hayes, believes that an AI bubble could trigger a crypto market rally. In his latest post on Substack, 'Situationship', Hayes noted that the current demand for AI stocks is similar to what occurred in 2008 when many investors piled into real estate, leading to the 2008 financial crisis.
Hayes predicts that if people begin to sell AI stocks, the prices of these stocks will fall, and risk causing an economic fallout. This would then prompt the Federal Reserve to intervene by reducing interest rates, which could lead to investors exiting their treasury yields for risk assets such as XRP.
The price of XRP has been stuck between $1.05 and $1.09 since July 28, with this suggesting that the buying pressure is too weak to support a sustained upward move. The RSI reading of 41 supports a bearish XRP price forecast, increasing the odds of the price dropping to $1.
However, Ripple's new investment in ZILO and Licuido to bring tokenization to XRP Ledger could potentially drive the price up if buyers come back amid bullish developments. The current short positions on XRP are also a concern, with data from CoinGlass showing that the XRP long/short has dropped to 0.94.