Bitcoin 'Crack-Up Boom' Looms as AI Credit Bubble Unwinds, Says Maelstrom Founder

Arthur Hayes, founder of Maelstrom, believes the AI boom is a credit bubble. He compared it to the 2008 crisis, where lenders poured money into property that stopped appreciating. According to Hayes, hyperscalers are building data centers, which are fundamentally real estate projects, not technology ventures.

Lenders are treating this debt as if they are funding Apple rather than Lehman Brothers. When AI capital expenditure growth decelerates in 2027 and contracts in 2028, the weakest credits will fail, and the government will step in with a bailout larger than anything seen after 2008.

Hayes thinks Bitcoin has already bottomed or is very close, with the asset likely sideways between $60,000 and $70,000 near term. He predicts potential downside to $50,000.

The AI credit expansion is already misallocating capital on a scale comparable to the US railroad boom as a percentage of GDP. This means the eventual bailout will dwarf the trillions printed after the financial crisis. Bitcoin was created as a direct response to that 2008 bailout. This time it already exists and is positioned to absorb the liquidity wave directly.

Hayes believes Ethereum (CRYPTO: ETH) will be the next trade, targeting $5,000 by year-end, roughly 2.6 times current levels. He thinks corporate chains like Robinhood Markets are building on Arbitrum, an Ethereum Layer 2, making Ethereum the security settlement layer for tokenized real-world assets.

Hayes pointed to the Fed's decision to hold rates last week as evidence the government is already engineering a steeper yield curve to make bank lending more profitable. He said banks are directing capital toward AI lending, and when those loans sour, governments will step in with a bailout that arrives quickly and at a scale the market is not prepared for.