Bitcoin to Hit $1 Million as AI Bubble Bursts: BitMEX Co-Founder Warns of Coming Crisis

Arthur Hayes, co-founder of BitMEX and Chief Investment Officer at Maelstrom, predicts Bitcoin will reach $1 million and Ethereum between $100,000 and $200,000 in value by the peak of the next market cycle. He attributes this forecast to his expectation that an AI bubble will burst, triggering a financial crisis greater than the 2008 subprime crash.

Hayes argues that an AI-driven capital expenditure could surpass the money spent building railways in the 19th century as a share of global GDP. He points out the issue of GPU loan mismatches and cheaper Chinese models, which he believes will lead to a credit event.

In an interview on Thinking Crypto, Hayes stated that Bitcoin's price won't bottom until there is a broader unwind in AI-related assets, which could happen this fall or years from now. He notes that AI capital spending drained liquidity away from risk assets like Bitcoin since the commercialization of ChatGPT in late 2022.

Hayes likens the current situation to a 19th-century railroad bubble, warning of GPU loan mismatches and cheaper Chinese models that could lead to a credit event. He believes that when the AI trade unwinds, all risk assets will likely fall in a correlated sell-off, marking Bitcoin's real bottom before another rebound.