AI Debt Mismatch Could Send Bitcoin to $1 Million

Arthur Hayes, co-founder of BitMEX and chief investment officer at Maelstrom, believes that a $1.5 trillion debt mismatch in AI-related spending could lead to a credit crisis, dwarfing the 2008 subprime collapse.

The mechanism behind this potential crisis is the absorption of U.S. M2 expansion by AI debt since late 2022, starving Bitcoin of liquidity and setting up a situation where it will absorb emergency liquidity injections when the AI bubble bursts.

Hayes notes that GPU loan mismatches are a key factor in this scenario, as financing for AI hardware is amortized over five to six years while leading-edge technology becomes obsolete in roughly two years.