AI Investment Boom Stifling Bitcoin's Rally

Bitcoin's sluggish performance is not due to a lack of liquidity, according to Arthur Hayes. In an interview, he attributed the AI investment boom as the market's biggest capital magnet, absorbing nearly every fresh dollar that would have otherwise flowed into crypto.

Hayes pointed out that the rise in dollar M2 has been largely matched by massive spending on AI companies and their supply chains. He compared this to the way investors previously chased Apple's suppliers whenever Apple entered a new growth cycle.

Hayes noted that people who made substantial money from AI are first spending on real-world assets like homes, luxury cars, expensive watches, premium travel, and even private aircraft. Others are choosing to diversify by buying more Nasdaq-listed technology companies instead of entering crypto.