Arthur Hayes: Oil price rise, AI-related IPOs, and Trump's anti-AI rhetoric may burst the AI bubble and drag down the crypto market

Odaily, June 9th — BitMEX co-founder Arthur Hayes stated in his latest article "Reality Test" that if oil prices continue to rise due to the US-Iran conflict, it could trigger a burst of the AI stock bubble and drag down the entire crypto market.

Hayes said that if traffic restrictions in the Strait of Hormuz extend deep into the second quarter, spot prices for hydrocarbons and other key commodities could rise in the third quarter. If oil prices continue to climb and inflationary pressures affect the US midterm elections, Trump might shift to a tougher stance on data center construction and AI regulation and taxation. Hayes believes the market may anticipate that Trump will limit AI capital expenditure and impose taxes on AI companies, thereby triggering the bursting of the AI stock bubble.

Hayes also noted that since November 2022, the scale of AI-related debt issuance has been approximately $1.5 trillion, and the US M2 money supply has also increased by about $1.5 trillion over the same period. He believes the three factors that could burst the AI bubble include rising energy costs, the market's inability to absorb the three major AI-related IPOs of SpaceX, Anthropic, and OpenAI, and Trump turning against AI. In terms of portfolio, Hayes stated that the Maelstrom equity portfolio holds large positions in US-listed energy producers; he has sold AI-related stocks and unloaded non-core crypto assets, last week selling HYPE, NEAR, and WLD, and also selling ZEC due to the Orchard Pool vulnerability. He still holds Bitcoin and ETH and will execute tactical short selling through derivatives.