Hayes Predicts AI Boom Will Send Bitcoin to $1M, Ethereum to $5K

Arthur Hayes, co-founder of BitMEX, says the AI boom is creating a credit bubble, where risk is concentrated in over-leveraged AI infrastructure debt. He believes this bubble will burst around 2027-2028, forcing governments to inject trillions into financial markets, which will eventually send Bitcoin to $1 million. According to Hayes, the AI spending boom is like lending to Lehman Brothers, not Apple, as lenders are treating data centers and power plants as financing opportunities.

Hayes predicts that leading AI companies will continue to earn massive profits, but their forward multiples will contract, causing solvency issues for the weakest AI credits. He estimates that the announced pace of capital expenditure buildout will start to moderate in the mid-to-late 2027 time frame, with the moderation becoming evident by 2028. China and the United States will eventually step in to bail out over-leveraged AI companies and their financiers on national security grounds, injecting trillions of dollars into financial markets.

In the short term, Hayes expects Bitcoin to consolidate in the range of $60,000 to $70,000, with a possible low of $50,000 before hitting a bottom. Over the long term, Bitcoin will peak in October 2025 at twice its previous all-time high and then drop by 50% as liquidity is drawn into the AI sector. A reversal of liquidity flows in mid-2026 will support Bitcoin in hitting a bottom and rebounding.