AI-Driven Financial Crisis Could Send BTC Prices Plummeting Before Soaring

Arthur Hayes, co-founder of BitMEX, has warned of an AI-driven financial crisis that could force the Federal Reserve to print unprecedented amounts of money. This, in turn, could send Bitcoin prices skyrocketing after a potentially steep drawdown.

In his blog post 'This Is Fine', Hayes detailed how widespread job losses due to AI adoption could lead to a wave of defaults on consumer credit and mortgage debt. He estimated that if 20% of the nation's 72.1 million knowledge workers were displaced, banks would face roughly $557 billion in combined consumer credit and mortgage losses, about half the severity of the 2008 global financial crisis.

Hayes pointed to early warning signs already visible in markets, including underperforming software SaaS stocks, private credit lenders selling off, and rising consumer credit delinquencies. He believes Bitcoin's divergence from tech equities since hitting its all-time high in October 2025 is a clear indication of an impending crisis.

Hayes also argued that the Fed's paralysis due to political turmoil could delay the central bank's response and deepen the eventual crisis. He suggested that incoming appointee Kevin Warsh may face obstacles from Chair Jerome Powell, who might remain on the Board of Governors after his term expires in May.