Arthur Hayes: AI Sucks Up Market Liquidity, Bitcoin Unlikely to Hit $100K by Year-End

Compiled & Translated by: Shenchao TechFlow

Guest: Arthur Hayes, Co-founder of BitMEX

Host: Kyle Chasse, CEO of Master Ventures

Podcast Source: Kyle Chasse crypto

Original Title: Arthur Hayes: Bitcoin's Final Dump Before The Pump

Air Date: June 10, 2026

Key Takeaways

Arthur Hayes has liquidated his largest crypto positions—HYPE, NEAR, Worldcoin, and Zcash. The reason isn't related to crypto itself, but a macro-driven chain of logic starting from oil prices, the Iran war, Trump's midterm election strategy, to the bursting of the AI bubble. He believes Trump, to salvage his midterm prospects, might reverse course and attack the AI industry. Once the AI bubble peaks, the crypto market won't be immune; SpaceX's IPO at a $1.8 trillion valuation and 100x price-to-sales ratio is, in his view, a ticking liquidity time bomb.

Key Insights Summary

Why Liquidate Everything

• "Voters don't like high oil prices, and they don't like energy-driven inflation increases."
• "The higher the oil price, the more eager everyone is to negotiate. Then the moment oil prices drop, suddenly no one wants to make a deal."

Trump Turns Anti-AI

• "If he wants to pull a rabbit out of a hat, the only issue he can flip is AI—briefly pick up the Democratic Party's megaphone, say he wants to protect the American people from AI, and then everyone will forget that the Republican Party provided all the funding for it."
• "The most destructive things for the AI narrative are taxes and regulation."

New Portfolio Allocation

• "Most of my liquid assets are in Treasuries and energy stocks."
• "I'm not saying AI won't continue to grow; rather, the market's willingness to pay forward multiples for that growth will decline, so the prices of these assets will fall."

The Math of the AI CapEx Bubble

• "I trade based on feel and intuition, not much on analysis. I feel we're in some phase of the AI bubble, but I'm not sure which one."
• "You can't pay 100x sales for SpaceX or any AI company when both earnings and capital expenditures are decelerating. The key is how fast the growth is, the rate of change, and your perception of that rate of change."
• "When you invest in AI, you're not investing in earnings, but in the capital expenditure buildout of data centers—you're betting on the second derivative, the acceleration or deceleration of the trend. If the trend is accelerating, you'll pay infinite multiples for forward revenue; if it's decelerating, you won't."
• "We've reached $800 billion in CapEx in 2026. By 2027, this second derivative will start to decelerate—you can't pay 100x sales for SpaceX or any AI company when both earnings and spending are slowing down."
• "There's always conflict between capital and labor. Whether voluntarily or forced, at some point an agreement must be reached."

Why Bitcoin Underperformed AI

• "Since ChatGPT's commercialization, US M2 has increased by about $1.5 trillion. During the same period, AI and AI-related companies issued about $1.5 trillion in debt—with $1.3 trillion concentrated in 2025 and 2026. AI absorbed all the excess liquidity."
• "When the bubble bursts, all correlations become 1—AI drops, Bitcoin drops, all assets drop together. Only after the dust settles will certain specific assets start to outperform."
• "In the next six months, due to rising oil prices and US political factors, there will be a major correction in the AI complex, and Bitcoin won't be spared."

The Trap of the SpaceX IPO

• "The market doesn't expect it to just trade normally. It expects this IPO to pop 50%, to have a ridiculous gain, to tell me the market still believes in AI, picked the right star company, and it will continue to soar."
• "With an issued market cap around $1.8 trillion, SpaceX would become the seventh largest company in the world. It trades at nearly 100x price-to-sales. That's fucking absurd. It will be the seventh largest company in the world having proven nothing."
• "This is a classic crypto scam pattern: low float, high fully diluted valuation, 4% to 5% float rising to nearly 25% by September—insiders will be dumping on you from July through October."

Evidence for an Anti-AI Strategy

• "I asked Perplexity AI to search all competitive districts for any legislation regarding data center building restrictions or local opposition. The result: if Trump goes anti-AI, it’s enough to flip enough seats to keep the House."
• "Trump has no ideology; he only cares about winning. He sent checks to every American in 2020—that's the purest form of direct money printing. So don't think he won't pivot to outright populism."

The Fed, Warsh, and Interest Rate Risk

• "Oil is higher and won't come down soon. The 2-year Treasury yield is currently about 60 basis points above the effective federal funds rate. The market is telling the Fed it needs to raise rates."
• "The thing bubbles fear most is rising interest rates. A rising cost of capital always, in some form, encourages people to leave the casino."
• "Currently, I don't see any room for Warsh to cut rates. If rate cut expectations are one of the pillars supporting your optimism about the AI bubble and its continuation, I think you need to seriously question that assumption."

Crypto Catalysts and Re-entry Timing

• "I really don't see many signs of money printing, and even when there is, it flows directly into AI construction."
• "If we return to that perfect economic sweet spot of high growth and low inflation, what do you buy? Do you buy Nvidia or Bitcoin? You'd obviously choose Nvidia, Samsung, right? Because they've gone up 50x in two years. Buy Bitcoin? Of course not."
• "That's the moment crypto can outperform—AI has been credit-crunched. Not that it ceases to exist, but it's not skyrocketing like before, so investors need to trade something else. I hope that something else is crypto, and then liquidity flows back to crypto."

Lightning Round

• "Bitcoin above or below $100k at year-end?—Below."
• "$1 million into any asset today—Bitcoin, HYPE, T-bills, Gold?—ExxonMobil."

Why Liquidate Everything

Host Kyle Chasse: Arthur, welcome back. You recently sold all your Zcash, HYPE, NEAR. Everyone is accusing you of exiting a scam, pumping and dumping, etc. Why did you sell everything, what's going on?

Arthur Hayes:

I just published an article called "Reality Check," about 5,000 words, outlining the thesis I'll summarize in a few minutes on this podcast. If you want a deeper dive, I strongly recommend reading it on my Substack. But essentially, the core is a reflexive interaction between oil prices and Trump's midterm election campaign rhetoric—he needs to help the Republicans defeat the Democrats in November and keep the Senate and House. The problem is the current Iran war—whether you like it or not, it's there, here, and now.

So Trump needs some kind of agreement with Iran's Revolutionary Guard to end the conflict. Both sides have a realistic constraint: oil prices determine how angry different parts of the world are at each party. Trump has to worry domestically—voters don't like high oil prices, don't like energy-driven inflation. Iran faces pressure from China and other developing countries—"What are you doing? We need this oil, these goods through the Strait of Hormuz. We know the US attacked you, but figure it out." So the higher the oil price, the more everyone is keen to negotiate. Then oil drops, and suddenly no one wants a deal. We've been swinging back and forth like this for about three months, or as long as the war has lasted.

As this progresses, we're actually depleting commercial and strategic reserves of oil and other hydrocarbons. Pick any energy analyst, their charts differ but the conclusion is the same—pre-war inventories were ample, leading people to believe in an oil and gas glut, which kept prices relatively low. But we're consuming these surpluses at an accelerating rate. We'll hit some level at some point—I don't know how many billion barrels, each analyst has their own number and estimated date. Once we cross that date, the situation will snap to a very, very bad state. The only way to balance the market again is to quickly push oil prices up.

That's the worst-case scenario—Trump and Iran's Revolutionary Guard can't make a deal. By October, the Strait of Hormuz is still effectively blockaded, with only 25% to 30% throughput, far from enough. A more likely scenario is that perhaps in a month or two, some agreement is reached, and shipping through the strait resumes to some degree. But then everyone needs to rebuild inventories; you must restock national reserves, and you'll hoard more than before—because you just experienced being completely at the mercy of Trump and a bunch of Iranian generals deciding whether your country can receive goods. So you think: "I'm going to stockpile more oil, gas, helium, everything needed to run a modern economy." This will create more demand, maybe not pushing prices to disastrous highs, but it still means oil, gas, and other commodity prices will be higher three or four months from now than they are today.

The Link Between Oil, War, and Elections

Arthur Hayes:

Following this logic, in the upcoming midterm elections (November 2026) for Trump and his Republican buddies, they are highly likely to lose the House. If you check Polymarket now, the odds of the Democrats regaining control of the House have shot up to 82%.

Why is that? Obviously, Trump is getting hammered on the cost of living issue. People think inflation is bad and getting worse. In the public's eyes, the Republicans are in the White House, and this damn conflict and war is something they stirred up, so the blame naturally falls on the Republicans. That's why everyone thinks they will lose, and lose badly.

The problem is that there's not much you can actually do about inflation—policies have long lags, and supply chains are only now digesting events from three or four months ago. I don't think Trump can turn the inflation narrative around much. People see and feel it at the gas pump. Trump doesn't have a Jedi mind trick to convince you inflation doesn't exist—it does, you see it every other day when you fill up. So what other issue could stir the entire US political spectrum? The answer is AI data centers—regulation around them, taxes, all of that. I think the Democrats are finding a perfect campaign message: no more data centers, tax AI giants, regulate AI. Because it's not just the poor who will lose jobs; the rich will also see their jobs replaced by AI, or at least that's what people fear.

Trump Turns Anti-AI

Arthur Hayes:

If you, as the opposition party, can exploit that fear, you have two powerful messages: the ruinous inflation caused by the Republican war, and the AI building boom effectively endorsed by Republican politicians. So my theory is, if Trump wants to pull a rabbit out of a hat, the only issue where he can flip his stance is AI. Pick up the Democratic megaphone and say: "We need more scrutiny on data centers, we need to establish an AI national dividend, tax them." That's classic Trump rhetoric. He can say a lot of things. Whether he acts on it after November is another matter. I think this is the only path they have a chance to win—positioning themselves as the party protecting Americans from AI, and then Americans will forget that the Republican party provided all the financing, because people are forgetful. So I see this as the main risk.

Trump's willingness to attack AI hinges purely on oil prices, which are a result of the reflexive relationship between him and Iran's Revolutionary Guard. The longer the war drags on without a solution, the more we accumulate commodity pressure that will eventually lead to price spikes, the more likely Trump is to take aim at AI to try and win the election, or at least help Republicans keep the House. Obviously, the most destructive things for the AI narrative are taxes and regulation. We saw it in South Korea; a politician stood up and suggested some kind of national AI tax, and Cosby hit its daily limit down that same day. So, I think if this kind of rhetoric starts being publicly promoted by the ruling party, especially by Trump, you'll see the AI bubble peak—at least for the next few months leading up to the election—and this will drag the crypto market down with it. That's the core thesis. I really didn't want to think about it anymore, so I cleared my entire portfolio in the latter half of last week.

New Portfolio Allocation

Host Kyle Chasse: Where are most of your liquid assets now, cash or Treasuries?

Arthur Hayes:

Treasuries and energy stocks.

Host Kyle Chasse: Do you still think energy can hold up if the AI bubble bursts?

Arthur Hayes:

We still need oil, like it or not. People need it; it drives civilization. And I'm not saying AI won't continue to grow; the issue is that our willingness to pay forward multiples for that growth will decline, so the prices of these assets will fall. That doesn't mean these companies won't have great earnings; it just means we thought they'd be even greater, and they aren't, so we sell these stocks. That's the logic.

The Math of the AI CapEx Bubble

Arthur Hayes:

I trade based on feel and intuition, not much on analysis. I feel we're in some phase of the AI bubble, but I'm not sure which one. I listened to Marco Papovich's podcast over the weekend; he's a strategist at BCA and has a solid YouTube channel called Geopolitical Cousins. I highly recommend subscribing. He shared many views in the podcast and in his writing. He made a crucial point: when you invest in AI, you're not investing in earnings, but in