Key Takeaways
- BitMEX founder Arthur Hayes has liquidated his entire altcoin portfolio, including positions in NEAR, Hyperliquid, and Worldcoin
- Hayes warns the AI sector represents an investment bubble likely to collapse between 2027 and 2028
- According to Hayes, Bitcoin won’t serve as a refuge during the AI bubble burst and will likely decline alongside other risk assets
- He forecasts that massive central bank money printing following an AI crash will ultimately drive Bitcoin to $1 million
- Hayes currently maintains only a long-term Bitcoin position while parking cash in US Treasury Bills
Arthur Hayes, who founded the cryptocurrency exchange BitMEX, has completely liquidated his altcoin holdings and is cautioning that the artificial intelligence investment mania could pull down cryptocurrency markets when the bubble eventually bursts.
During a recent Bankless podcast episode and subsequent media appearances, Hayes outlined his perspective that capital has flowed from crypto into AI investments, and that the reversal of this trend will inflict significant damage on digital asset prices.
Complete Altcoin Exit
Hayes revealed he has completely closed out his holdings in Near Protocol, Hyperliquid, and Worldcoin, along with other altcoin positions. According to Hayes, the risk-reward ratio had shifted unfavorably.
He characterized his investment stance as being “permanently Bitcoin long,” while maintaining liquidity in US Treasury Bills to generate yield.
His departure from AI-related cryptocurrency projects is being interpreted by market participants as a bearish indicator. Since Near Protocol and Worldcoin both operate at the intersection of artificial intelligence and blockchain technology, abandoning these positions suggests Hayes anticipates a broader collapse of the AI-crypto narrative rather than simple sector rotation.
Interestingly, Hayes mentioned he would allocate any additional capital to Ethereum over Bitcoin, describing it as offering better value at present price levels.
Warning of AI Investment Mania
Hayes drew parallels between the current AI investment surge and the 19th-century railroad expansion bubble. He argues that corporations are using faulty depreciation assumptions, applying five to six-year equipment lifespans to chips that become obsolete within two years.
This accounting disconnect will create serious market disruptions by 2027 or 2028, Hayes predicts, potentially triggering a credit crisis exceeding the 2008 financial collapse.
Hayes identified three critical vulnerabilities. Energy costs continue climbing, threatening AI company profitability. US regulatory policy toward AI firms could pivot abruptly. Additionally, the anticipated public offerings of Anthropic and OpenAI will consume substantial institutional capital, siphoning funds away from cryptocurrency and other speculative investments.
According to Hayes, AI has essentially diverted investment flows from crypto. When investors can chase AI equities delivering 20x returns within six months, Bitcoin becomes comparatively unattractive.
Bitcoin Won’t Provide Refuge
Despite maintaining long-term optimism about Bitcoin, Hayes cautioned it won’t remain insulated if AI investments collapse. He believes Bitcoin will be “thrown out with the bathwater” during a widespread risk-off market event.
Hayes anticipates that central banking authorities will respond to an AI sector implosion with aggressive monetary expansion. This newly created liquidity, he contends, will ultimately migrate into Bitcoin since it cannot return to a discredited AI sector.
This represents the pathway through which he envisions Bitcoin climbing to $1 million. However, Hayes emphasizes that reaching this target requires navigating through a severe market correction first.
AI-themed digital assets have been capturing capital even within cryptocurrency markets. AI-related BRC-20 NFTs recently generated $17.8 million in weekly trading volume, demonstrating how the AI theme has redirected attention and investment away from layer-1 blockchain tokens and decentralized finance protocols.
Hayes has exited this trading theme entirely. Whether additional investors will follow his lead before the market peaks remains uncertain.
