AI Bubble Warning: Hayes Sees Bitcoin at $1 Million as Credit Crisis Looms

Arthur Hayes, co-founder of BitMEX, has warned that the current AI spending boom is creating a credit bubble. He believes this bubble will burst around 2027-2028, sending shockwaves through financial markets and paving the way for Bitcoin to reach $1 million.

Hayes argues that AI capital expenditure is being mispriced by markets, with lenders treating data centers and power plants as financing opportunities similar to lending to Apple, rather than Lehman Brothers. He estimates that this bubble will burst when data center construction growth slows or hyperscaler forward guidance decelerates, putting pressure on the balance sheets of leveraged holders of AI-related debt.

Hayes predicts that governments will eventually step in to bail out over-leveraged AI companies and their financiers on national security grounds, injecting trillions into financial markets. In the short term, he expects Bitcoin to consolidate in the range of $60,000 to $70,000 before hitting a bottom.

Hayes remains bullish on Ethereum, forecasting it to reach $5,000 by the end of 2026. He believes that Ethereum will become the settlement layer for tokenized capital markets and that his family office, Maelstrom, will profit from staking on Ethereum.