AI Capital Floods Into Bitcoin as Governments Intervene

Bitcoin's recent three-day rally has been its strongest since 2023, and two prominent investors believe it reflects capital fleeing an overheated artificial intelligence (AI) trade. Research firm K33 flagged this possibility in June, but now established investors are confirming the shift.

Bill Miller IV, chairman and chief investment officer at Miller Value Partners, argues that growing doubt about AI's returns is pushing 'long-dated thinkers' back toward crypto. Governments have also intervened twice in quick succession, with Japan and the US supporting the yen and the US Treasury Department announcing it would double its long-dated bond buybacks.

Miller views Bitcoin as both a tactical rotation target and a long-term hedge against government debt. This year's $1.8 trillion US budget deficit exceeds Bitcoin's entire market capitalization, illustrating how much new currency is being created against Bitcoin's fixed supply.

Miller believes investors are returning to 'harder, more transparent forms of money' across market cycles. His view echoes recent reactions from other prominent voices, including Robert Kiyosaki and Arthur Hayes.