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

Compiled & Translated 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 related to crypto itself but stems from a macro deduction chain involving oil prices, the Iran conflict, Trump's midterm election strategy, and the bursting of the AI bubble. He believes Trump, in an attempt to salvage the midterm elections, may reverse his stance to 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 a 100x price-to-sales ratio, in his view, is a ticking liquidity time bomb.

Highlights of Key Insights

Why Liquidate Everything

• "Voters don't like high oil prices, don't like energy-driven inflation."
• "The higher oil prices go, the more eager everyone is to negotiate, and then when prices drop, suddenly nobody 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—briefly take up the Democrats' rhetoric, say he wants to protect Americans from AI, and then everyone will forget it was the Republicans who financed it all."
• "The most destructive things for the AI narrative are taxes and regulation."

New Portfolio Allocation

• "Most of my liquid assets are in Treasury bonds 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, 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 profits and capex are decelerating. The key is how fast the growth is, 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 a 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 profits and spending are slowing down."
• "There will always be conflict between capital and labor, whether voluntary or forced, and at some point an agreement will be reached."

Why Bitcoin Has Underperformed AI

• "From ChatGPT's commercialization until now, US M2 has increased by about $1.5 trillion, but AI and AI-related companies have issued roughly $1.5 trillion in debt during the same period—with $1.3 trillion concentrated in 2025 to 2026. AI has sucked up all the excess liquidity."
• "When the bubble bursts, all correlations go to 1—AI falls, Bitcoin falls, all assets fall together, until the dust settles and then certain assets start to outperform."
• "Over the next six months, due to rising oil prices and US political factors, the AI complex will undergo a major correction, and Bitcoin won't be immune."

The Traps of the SpaceX IPO

• "The market doesn't expect it to trade normally; it expects this is an IPO, it needs to surge 50%, have an insane gain, to tell me the market still believes in AI, chose this star company, and it will continue to soar."
• "SpaceX's issuance market cap of around $1.8 trillion would make it the seventh-largest company globally. SpaceX is trading at nearly 100x price-to-sales. This is absurd; it would be the world's seventh-largest company without having proven anything."
• "This is a classic crypto scam pattern: low float, high fully diluted valuation, 4% to 5% circulating supply, which will climb to nearly 25% by September—insiders will be continuously selling to you from July to October."

Evidence for an Anti-AI Strategy

• "I had Perplexity AI search all competitive districts for any legislation on data center restrictions or local opposition. The result: if Trump pivots against AI, it's enough 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—the purest form of direct cash handouts. So don't think he won't turn to blatant populism."

The Fed, Warsh, and Interest Rate Risk

• "Oil is higher and won't come down in the near term. The 2-year Treasury yield is currently about 60 basis points above the effective federal funds rate. The market is telling the Fed: you need to raise rates."
• "The worst thing for a bubble is rising interest rates. The rising cost of capital invariably prompts people to leave the casino in some form."
• "Currently, I don't see room for Warsh to cut rates. If rate cut expectations are one of the pillars supporting your optimism for 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 if there is, it flows directly into AI infrastructure."
• "If we return to that sweet spot of high growth, low inflation, what would you buy? Would you buy Nvidia or Bitcoin? You would choose Nvidia without hesitation, or Samsung, right? Because they've gone up 50x in two years. Would you buy Bitcoin? Of course not."
• "That's the moment crypto can outperform—AI is credit-impaired, not gone, but 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 $100k by year-end?—Below."
• "If you had to put $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 saying you're exiting the scam, pumping and dumping. 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'm going to explain 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 the 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 control of both chambers. The issue is the current Iran conflict—whether you like it or not, it's here.

So a deal needs to be reached between Trump and Iran's Revolutionary Guard to end this conflict. And both sides have a real constraint: oil prices determine how angry different parts of the world are with 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. I know the US attacked you, but figure it out." So the higher oil prices go, the more eager everyone is to negotiate, and then when prices drop, suddenly nobody wants to make a deal. So we've been swinging back and forth in this tug-of-war for about three months, or as long as the war has lasted.

As this process progresses, we are actually depleting commercial and national reserves of oil and other hydrocarbons. Pick any energy analyst; their charts vary but the conclusion is the same—pre-war inventories were ample, so people believed in oversupply, leading to relatively low prices. But we are now consuming those surpluses at an accelerating rate. We will reach some threshold at some point—I don't know how many billions of barrels, each analyst has their own number and estimated date. Once we cross that date, the situation will turn very, very bad quickly. And the only way to rebalance the market is to push oil prices up rapidly.

That's the worst-case scenario—Trump and Iran's Revolutionary Guard can't reach a deal. By October this year, the Strait of Hormuz is still effectively blocked, with only 25% to 30% of normal traffic getting through, but nowhere near enough. The more likely scenario is that maybe in a month or two, some kind of deal is reached, and shipping through the strait resumes to some extent. But then everyone needs to rebuild inventories. You have to rebuild national reserves, and you'll certainly hoard more than before—because you just experienced being entirely at the mercy of Trump and a group of Iranian generals determining whether your country receives goods. So you'll think: "I need to stockpile more oil, natural gas, helium, everything needed to run a modern economy." This will lead to more demand, which might not push prices to the highs of the catastrophic scenario, but it still means that three or four months from now, oil, natural gas, and other commodity prices will be higher than today.

The Link Between Oil, War, and Elections

Arthur Hayes:

Following this logic, during Trump and his Republican allies' midterm elections (November 2026), the House is very likely to be lost. If you look at Polymarket odds now, the probability of Democrats retaking control of the House has surged to 82%.

Why is that? Obviously, Trump is being 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 started this damn conflict and war, so naturally, they'll bear the blame. That's why everyone thinks they will lose, and lose badly.

The problem is there's little you can do about inflation—policies have long lags, and the supply chain is only now digesting what happened 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 has no Jedi mind trick to make you believe inflation doesn't exist—it does, and you see it every time you fill up every other day. So what other issue can stir the entire American political spectrum? The answer is AI data centers—regulation around them, taxes, all of that. I think the Democrats are finding a great campaign message: stop building data centers, tax the AI giants, regulate AI. Because not only will poor people lose their jobs, but rich people's jobs will also be replaced by AI, at least that's what people fear.

Trump's 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 that if Trump wants to pull a rabbit out of his hat, the only issue he can flip his stance on is AI. He picks up the Democrats' microphone and says: "We're going to increase scrutiny on data centers, we're going to establish an AI national dividend and tax them." That's classic Trump rhetoric. He can say a bunch of things; whether he does them after November is another matter. I think this is the only path they have to win—positioning themselves as the party protecting Americans from AI, and then Americans will forget it was the Republicans who financed it all, because people are forgetful. So I think this is the main risk.

And Trump's willingness to attack AI depends purely on oil prices, which are the result of his reflexive relationship with Iran's Revolutionary Guard. The longer this war drags on without a solution, the more we accumulate commodity pressure that will lead to future price spikes, and the more likely Trump will go after AI in an attempt to win the election, or at least help the Republicans keep the House. Obviously, the most destructive things for the AI narrative are taxes and regulation. We've seen it in Korea—a certain Korean politician proposed some kind of national AI tax, and Cosby hit its daily limit down that day. So I think if this kind of rhetoric starts being publicly championed by the ruling party, especially by Trump, you'll see the AI bubble peak, at least for the next few months until the election, and this will drag the crypto market down with it. That's the core thesis overall. I really don't want to think about this anymore, so I liquidated my entire portfolio in the latter part 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, whether you like it or not. People need oil; it drives the entire 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 decrease, so the prices of these assets will fall. This doesn't mean these companies won't make great profits; it's just that 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 great YouTube channel called Geopolitical Cousins, I highly recommend subscribing. He laid out many points in the podcast and his