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

Edited & Compiled by: Odaily 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 crypto-specific, but rather a macro chain reaction stemming from oil prices, the Iran war, Trump's midterm election strategy, and the bursting of the AI bubble. He believes Trump might reverse his stance to attack the AI industry to salvage his midterm election prospects, and once the AI bubble peaks, the crypto market won't be immune. He views SpaceX's IPO at a $1.8 trillion valuation and a 100x price-to-sales ratio as a ticking time bomb for liquidity.

Highlights of Key Opinions

Why Liquidate Everything

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

Trump's Potential Pivot Against AI

• "If he wants to pull a rabbit out of his hat, the only issue he can flip is AI—temporarily borrowing the Democratic Party's playbook, saying he needs to protect the American people from AI, and then everyone forgets it was the Republicans who financed it all."
• "What could be most devastating to the AI narrative is taxes and regulations."

New Portfolio Allocation

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

The Math of the AI CapEx Bubble

• "I trade based on gut feeling and intuition, not relying much on analysis. I feel like we're in some phase of the AI bubble, I'm just 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 point isn't how fast the growth is, but the rate of change and your perception of that rate."
• "When you invest in AI, you're not investing in earnings; you're investing in the construction of data center CapEx—you're betting on the second derivative, the acceleration or deceleration of the trend. If the trend is accelerating, you're willing to pay infinite multiples for forward revenue; if it's decelerating, you're not."
• "We're already at $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 is always a conflict between capital and labor, whether voluntary or forced. At some point, some kind of agreement has to be reached."

Why Bitcoin Underperformed AI

• "Since the commercialization of ChatGPT, the U.S. M2 has increased by about $1.5 trillion, but during the same period, AI and AI-related companies have issued about $1.5 trillion in debt—with $1.3 trillion concentrated in 2025-2026. AI has sucked up 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 U.S. political factors, the AI complex will undergo a major correction, and Bitcoin will not be spared."

The Trap in the SpaceX IPO

• "The market expectation isn't that it trades normally. It expects this IPO to soar 50%, to have an insane pop, to tell me the market still believes in AI, chose the right star company, and it will continue to skyrocket."
• "With an issue market cap of around $1.8 trillion, SpaceX would immediately become the 7th largest company globally. It's trading at nearly 100x price-to-sales. That is fucking absurd. It would be the 7th largest company and has proven nothing."
• "This is a classic crypto scam pattern: low float, high fully diluted valuation, 4% to 5% circulating supply rising to nearly 25% by September—insiders will be selling to you continuously from July to October."

Evidence for an Anti-AI Strategy

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

The Fed, Warsh, and Interest Rate Risk

• "Oil prices are higher and won't come down anytime 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."
• "What bubbles fear most is rising interest rates. The rising cost of capital always, in some form, drives people away from the casino."
• "I see no room for Warsh to cut rates right now. If the expectation of rate cuts is 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 don't really see many signs of money printing, and even if there is, it's flowing directly into AI construction."
• "If we return to the perfect economic sweet spot of high growth and low inflation, what would you buy? Would you buy Nvidia or Bitcoin? You would choose Nvidia without hesitation, or Samsung, right? Because they went up 50x in two years. Would you buy Bitcoin? Of course not."
• "That is the moment crypto can outperform—when AI is credit-crippled. Not that it ceases to exist, but it's no longer skyrocketing like before, so investors need to trade something else. I hope that something else is crypto, and then liquidity flows back into crypto."

Lightning Round

• "Bitcoin above or below $100,000 by the end of the year? — Below."
• "Invest $1 million today in any asset—Bitcoin, HYPE, T-bills, Gold? — ExxonMobil."

Why Liquidate Everything

Host Kyle Chasse: Arthur, welcome back. You recently sold all your Zcash, HYPE, and NEAR. Everyone is calling you a scam-exiter, a pump-and-dumper. Why did you sell everything? What's going on?

Arthur Hayes:

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

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

As this process unfolds, we are gradually drawing down commercial and national inventories of oil and other hydrocarbons. Pick any energy analyst—their charts differ but the conclusion is the same: pre-war inventories were ample, leading to a belief in an oil and gas glut and relatively low prices. But we are now burning through this surplus at an accelerating rate. We will hit some level at some point—I don't know how many billions of barrels, each analyst has their own number and projected date. Once we cross that date, the situation will turn very, very bad quickly. The only way to rebalance the market is to push oil prices up rapidly.

This is the worst-case scenario—Trump and the IRGC can't reach a deal. By October this year, the Strait of Hormuz is effectively blockaded, with only 25% to 30% of normal traffic getting through, far from enough. A more likely scenario is that some deal is reached in a month or two, and shipping resumes somewhat. But then everyone needs to rebuild inventories and national reserves. And you'll hoard more than before—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'll think, "I need to stockpile more oil, gas, helium, everything needed to run a modern economy." This will create more demand. It might not push prices to the highs of the catastrophic scenario, but it still means oil, gas, and other commodity prices will be higher three or four months from now than they are today.

The Connection Between Oil, War, and Elections

Arthur Hayes:

Following this logic, in the upcoming midterm elections (November 2026), the House is likely to be taken from Trump and his Republican buddies. If you look at Polymarket right now, the odds of Democrats retaking the House have soared to 82%.

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

The problem is that you can't really do much about inflation—policy has long lags, and the supply chain is only now digesting what happened three or four months ago. I don't think Trump can change the inflation narrative much. People can see and feel it at the gas pump. Trump has no Jedi mind trick to make people believe inflation doesn't exist—it does, and they see it every other day when they fill up. So what other issue can stir the entire American political spectrum? The answer is AI data centers—surrounding regulations, taxes, and everything. I think the Democrats are finding a great set of campaign messages: no more data center building, tax the AI giants, regulate AI. Because not only will the poor lose their jobs, but the rich will also lose theirs to AI, or at least that's the fear.

Trump's Potential Pivot Against AI

Arthur Hayes:

If you, as the opposition party, can exploit this fear, you have two powerful messages: the ruinous inflation caused by the Republican war, and the AI construction boom effectively endorsed by Republican politicians. So my theory is, if Trump wants to pull a rabbit out of his hat, the only issue he can flip his position on is AI. He can borrow the Democratic Party's playbook and say, "We need more scrutiny of data centers, we need to create an AI national dividend and tax them." That's the Trumpian rhetoric. He can say a lot of things, and whether he does them after November is another story. I think this is the only viable path for them to win—positioning themselves as the party protecting Americans from AI, making people forget it was the Republicans who financed it all, because people have short memories. So I see this as the main risk.

And Trump's willingness to attack AI depends purely on the price of oil, which is a result of the reflexive relationship between him and the IRGC. The longer the war drags on without a solution, the more we accumulate commodity pressure that will eventually spike prices. The more likely Trump is to take a swing at AI to try to win, or at least help the Republicans keep the House. Obviously, what is most devastating to the AI narrative is taxes and regulations. We saw it in Korea—a politician came out and said they should impose some kind of national AI tax, and Cosby hit the limit-down that day. So I think if this rhetoric starts to be publicly promoted by the ruling party, especially by Trump, you will see the AI bubble peak, at least for the next few months until the elections, 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 liquidated my entire portfolio in the latter part of last week.

New Portfolio Allocation

Host Kyle Chasse: So where are most of your liquid assets now? Cash or Treasuries?

Arthur Hayes:

Treasuries and energy stocks.

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

Arthur Hayes:

We still need oil, regardless of whether you like it or not. People need oil; it drives our civilization. And I'm not saying AI won't continue to grow. The issue is that the market's willingness to pay forward multiples for that growth will decrease, and therefore the prices of these assets will fall. It doesn't mean these companies won't report great earnings—it just means we thought they would be even better, and they aren't, so we sell those stocks. That's the logic.

The Math of the AI CapEx Bubble

Arthur Hayes:

I trade based on gut feeling and intuition, not relying much on analysis. I feel like we're in some phase of the AI bubble, I'm just not sure which one. Over the weekend, I listened to a podcast by Marco Papovich, a strategist at BCA. He has a great YouTube channel called Geopolitical Cousins—I highly recommend subscribing