AI Credit Crisis Could Push Bitcoin Price to $1 Million

Arthur Hayes, co-founder of BitMEX and chief investment officer of Maelstrom, has warned that an AI-driven credit crisis could push Bitcoin's price to $1 million. Hayes argues that the loss of white-collar jobs will lead to a severe credit crisis, forcing the Federal Reserve to engage in large-scale money printing.

The Fed's response would be similar to its actions during the 2008 Global Financial Crisis, but with a key difference: AI tools can replicate digital information at the speed of light, compressing the timeline for job losses and credit destruction. Hayes believes that the credit system will not have time to absorb the shock gradually.

The worst-case scenario for traders is that Bitcoin's drawdown from $126,000 to around $60,000 was only the beginning of a larger decline, with equities eventually converging lower to confirm the macro thesis. Hayes advises against adding leveraged exposure until a confirmed Fed pivot.