BitMEX co-founder Arthur Hayes warns that Bitcoin’s recent decline, diverging from a flat Nasdaq, signals an AI-driven credit crisis. He estimates potential losses of over $330 billion in consumer credit if AI displaces 20% of knowledge workers. While experts acknowledge the long-term risk, they suggest such economic disruption would unfold over quarters, not weeks, as markets adjust.
Bitcoin is signaling a warning that traditional equities have yet to acknowledge, according to BitMEX co-founder Arthur Hayes. The leading cryptocurrency has been on a downtrend since its October all-time high of $126,080, while the Nasdaq 100 Index has remained largely flat.
Hayes argues this divergence is driven by job losses from artificial intelligence advances, suggesting it signals an impending dollar credit crunch. In his Substack post titled “This Is Fine,” he wrote, “This is how a banking crisis completely grinds Pax Americana’s economy to a halt.”
Not everyone is convinced the divergence carries such dire implications. “Divergence is worth watching, but only one data point rather than a confirmed alarm,” said Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital.
Colin Goltra, CEO of Morph, noted the relationship between Bitcoin and equities is not static. He stated that short-term divergences are neither new nor inherently revealing of broader market trends.
Hayes contends Bitcoin reacts first to liquidity headwinds as the most responsive asset to fiat credit conditions. He believes the Nasdaq has yet to price in an AI-driven wave of white-collar job displacement that will trigger widespread consumer credit and mortgage defaults.
Hayes estimates $330 billion in consumer credit losses and $227 billion in mortgage losses for U.S. commercial banks if 20% of knowledge workers lose their jobs. McMillin pushed back on the proposed timeline, arguing labor markets do not work that cleanly and disruption would happen over quarters, not weeks.
He acknowledged, however, that the directional concern is not wrong, citing rising credit card delinquencies and pressure on SaaS valuations. The crisis timeline is likely more stretched than Hayes suggests, according to McMillin.
Hayes points to gold’s recent strength relative to Bitcoin’s slide as a market signal. He wrote that this indicates “that a deflationary risk-off credit event within Pax Americana is brewing.”
Goltra agreed the Federal Reserve would respond forcefully to any crisis. He said such interventions gradually change how participants view the monetary system’s durability, reinforcing the case for fixed-supply assets.
Bitcoin has declined 27% over the past month and currently trades near $67,000. Hayes presented a two-scenario path for traders, with the eventual outcome being massive money printing that sends Bitcoin to new highs.
