AI Debt Bubble Threatens Credit Crisis, Hayes Predicts $1 Million Bitcoin

Arthur Hayes, co-founder of BitMex, believes that debt behind AI data centers and power infrastructure could drive a credit crisis. This, in turn, would prompt government intervention, sending new liquidity into Bitcoin. He views the AI boom as a lending cycle rather than a technology earnings bubble.

Hayes argues that investors have valued AI infrastructure like fast-growing technology businesses, but much of the spending resembles debt-funded property development. Banks and other lenders may continue financing data centers, power generation, and supporting infrastructure until AI capital expenditure slows.

He expects excess capacity to leave weaker borrowers unable to service their debts, creating a scenario similar to 2008's credit crisis. Governments and central banks would likely respond with bailouts and monetary support, injecting liquidity into the market. Hayes believes this could eventually drive Bitcoin to $1 million or more, but notes that several uncertain events must unfold.

Hayes does not expect an immediate Bitcoin rally, predicting it could trade between $60,000 and $70,000 before potentially falling to $50,000 as investors reduce risk during the early stage of a credit shock. He has linked Bitcoin's performance to growth in fiat money and credit, describing it as highly responsive to global liquidity conditions.