Arthur Hayes has turned sharply defensive on risk assets, warning that an AI 
stock-market unwind could spill into crypto before Bitcoin eventually benefits 
from the liquidity response that follows. In his June 9 essay “Reality Test,” 
the BitMEX co-founder said Maelstrom has cut several crypto positions while 
keeping Bitcoin and Ether as core holdings. Hayes’ argument starts outside 
crypto, with oil. He frames the US-Iran conflict and reduced Strait of Hormuz 
traffic as the central macro variable for markets, arguing that higher 
hydrocarbon prices could feed inflation, constrain US political options and 
pressure the AI trade that has dominated capital allocation since late 2022. 
“We start with oil and end with an election in Pax Americana,” Hayes wrote. 
“This story arc could produce a situation whereby the AI stock bubble pops and 
takes the entire crypto complex down with it. When the dust settles, then and 
only then, can Bitcoin rise from the ashes.” Hayes Turns Bearish On Crypto And 
Risk Assets The core of Hayes’ thesis is that AI has absorbed the dollar 
liquidity that, in previous cycles, might have flowed more directly into 
Bitcoin and crypto. He notes that Bitcoin rose from around $15,000 after the 
FTX collapse to roughly $125,000 by October 2025, but says AI equities still 
outperformed, led by Nvidia’s 11x move over the same period. Since Bitcoin’s 
all-time high, he says BTC is down 50%, while Nvidia has still risen about 
10%. Related Reading: ‘Coldest Crypto Winter Ever’: Bloomberg’s Weisenthal 
Lists 12 Reasons Hayes argues this divergence reflects where new fiat 
liquidity actually went. By his estimate, AI-related companies issued roughly 
$1.5 trillion of debt since November 2022, matching the $1.5 trillion increase 
in M2 over the same period. He adds that $1.3 trillion of that AI debt 
issuance occurred from 2025 onward, just as Bitcoin’s rally stalled. “AI 
sucked up all created dollars,” Hayes wrote. “Bitcoin never had a chance.” 
That is why, in his view, an AI correction would not immediately be bullish 
for crypto. Hayes expects a sharp drawdown in AI stocks to damage bank 
lending, tighten credit and destroy speculative capital before policymakers 
respond with fresh liquidity. “Bitcoin cannot rally in the short term if the 
entire world takes serious losses from the deflation of the AI bubble 
globally. Eventually, it will bottom, then rise as Bitcoin forecasts an 
increase in liquidity to put Humpty Dumpty back together again. But right now, 
it’s about protecting one’s crypto capital.” Hayes identifies three potential 
catalysts for the AI bubble to break: higher energy costs, supply pressure 
from major AI-linked IPOs, and anti-AI rhetoric from Donald Trump as election 
politics intensify. He argues that rising oil and natural gas prices directly 
raise the cost of producing AI tokens, compressing margins for model companies 
such as Google, Anthropic and OpenAI. If usage growth slows and earnings 
assumptions weaken, he says the market could begin questioning future data- 
center capex. Related Reading: Crypto Is A ‘Failed’ Asset Class, Says Renowned 
Economist The IPO calendar is another pressure point. Hayes says SpaceX, 
Anthropic and OpenAI could test the market’s ability to absorb enormous supply 
at elevated valuations. He focuses in particular on SpaceX, writing that its 
S-1 implies investors would pay roughly 100x sales, with only 4% to 5% of 
shares floated initially. He says SpaceX would immediately become a $1.8 
trillion company, ranking seventh globally by market cap, while its float 
could increase fivefold by early September. Hayes also sees the Federal 
Reserve as unlikely to rescue risk assets immediately. He says the two-year 
Treasury yield trading more than 0.5 percentage points above the effective fed 
funds rate implies the market is pricing pressure for tighter policy, not 
cuts, ahead of the June 16-17 meeting. A “hawkish hold,” in his view, would 
add another headwind to AI equities and crypto. The portfolio response has 
already started. Hayes said Maelstrom has moved long US-listed energy 
producers and exited several non-core crypto positions. “I dumped HYPE, NEAR, 
and WLD last week,” he wrote. “I also dumped ZEC because of the Orchard Pool 
bug. I wish I didn’t have to do that, but capital preservation is more 
important than capital appreciation.” Bitcoin and Ether remain. Hayes 
described Ether as “dead but functional,” saying he has no immediate reason to 
liquidate it. For Bitcoin, his base case is more volatile: a near-term 
drawdown if the AI bubble bursts, followed by a stronger rebound once the 
financial system requires another major liquidity injection. At press time, 
BTC traded at $62,638. Featured image created with DALL.E, chart from 
TradingView.com

Arthur Hayes has turned sharply defensive on risk assets, warning that an AI stock-market unwind could spill into crypto before Bitcoin eventually benefits from the liquidity response that follows. In his June 9 essay “Reality Test,” the BitMEX co-founder said Maelstrom has cut several crypto positions while keeping Bitcoin and Ether as core holdings. Hayes’ &#8230;

Arthur Hayes Warns AI Stock Crash Could Hit Crypto Before BTC Rebounds

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Arthur Hayes Warns AI Stock Crash Could Hit Crypto Before BTC Rebounds

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