AI Bubble Bust Could Lift Bitcoin, Arthur Hayes Says

Bitcoin dropped toward $83,800 as around $403.58 million in leveraged crypto long positions were liquidated within an hour. The sharp deleveraging highlights the market’s risk-off environment and adds context to Arthur Hayes’s longer-term view that an AI-related credit crisis could eventually lead to a bailout and a fresh wave of liquidity for crypto.

Hayes’s argument is built around the massive expansion of AI data-center infrastructure. He believes the spending boom could initially weigh on risk assets, but if financing problems become severe enough to require government support, the resulting liquidity could eventually benefit Bitcoin.

The amount of capital required for the AI buildout makes the financing risk significant. Estimates cited in the report suggest U.S. AI infrastructure spending could reach between $2.8 trillion by 2030 and $10.3 trillion by 2032. Credit platform Atrium estimates that developers have already raised at least $1.3 trillion through debt.

Hayes argues that the problem is not simply excessive spending. His concern is that the industry could create a large amount of computing capacity while leaving infrastructure providers with substantial financial obligations. Those obligations depend on AI customers being able to pay for the computing resources they have committed to use.

SpaceX, OpenAI and Anthropic are among the companies expected to generate demand for this capacity. Hayes has pointed out that none is currently profitable. Columbia economist Stijn van Nieuwerburgh estimates that producing a 10% return on the infrastructure investment would require around $3.7 trillion in annual revenue by 2032.

The potential mismatch between infrastructure costs and customer revenues is therefore central to Hayes’s thesis. The decisive test could arrive when new computing facilities begin delivering capacity, which he expects around late 2027 or 2028. Strong demand for AI computing today does not guarantee that all of those projects will produce sufficient returns to cover their financing costs.

The potential bullish effect on Bitcoin would come only later. Hayes expects a credit crisis to force policymakers into a bailout, with the resulting excess liquidity potentially flowing into crypto. That scenario depends on a significant credit shock occurring and authorities responding with measures that increase liquidity.

Bitcoin’s current weakness shows how quickly leverage can amplify market moves. The report placed BTC roughly 33% below its October 2025 all-time high of $126,000. The $403.58 million in long liquidations as Bitcoin approached $83,800 demonstrates the force of leveraged unwinding, although it does not establish a price bottom or forecast the size of another decline.

An AI-related credit crisis could initially put even more pressure on Bitcoin. Investors could reduce exposure to risk assets, while falling prices could trigger forced closures of leveraged positions and additional liquidation selling. Bitcoin would remain exposed to this risk-off phase even if a later bailout created conditions favorable for crypto.

Hayes’s overbuild thesis would be weakened if AI companies successfully pay for their contracted computing capacity and infrastructure investments generate sustainable returns. But if customers cannot meet those commitments once new capacity arrives in late 2027 or 2028, Hayes expects the resulting stress could develop into a credit crash and eventually a bailout.

Even under that scenario, Bitcoin would need two conditions to benefit. The financial stress would have to be severe enough to trigger intervention, and the policy response would need to create liquidity that reaches crypto markets rather than being used solely to stabilize traditional credit.

Federal Reserve rate expectations and inflation data could further influence liquidity and risk appetite, adding another variable to the relationship between credit conditions, policy responses and Bitcoin prices.

For now, Hayes’s argument should be viewed as a long-term macro framework rather than an immediate trading call. An AI infrastructure bust could ultimately become bullish for Bitcoin if it produces financial stress followed by a liquidity-heavy bailout. In the near term, however, the latest liquidations show that leverage remains one of crypto’s biggest sources of downside volatility.