AI Spending Fuels $200k Bitcoin Boom-Is the Biggest Liquidity Bubble Coming?

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Arthur Hayes Warns AI is Fueling History’s Biggest Liquidity Bubble

Arthur Hayes, the former CEO of BitMEX and currently CIO at Maelstrom, believes the intense competition to develop artificial intelligence is causing a massive increase in traditional currency lending. He thinks Bitcoin will ultimately profit the most from this situation.

In his newest newsletter, Hayes suggests that countries are viewing AI investment as a crucial competition for dominance. He notes that central banks and traditional lenders are now providing ongoing financial support for AI development.

Arthur Hayes Says Credit Channel Replaces Cash Flow

As a researcher tracking AI investment, I’ve noticed that most of the capital expenditure in US AI has, up until now, been funded internally – by the operating cash flow of the biggest software companies. However, recent analysis by Hayes suggests this source of funding is starting to dry up, and we’re likely to see bank loans play a much larger role in financing future AI development.

According to a recent newsletter, companies now need to borrow more money to cover their current and planned investments in things like equipment and facilities.

China’s President Xi Jinping has encouraged banks to shift their focus from property and invest more in technology. Both the U.S. Federal Reserve and China’s central bank have also taken steps to make it easier to finance this development.

Hayes uses Jevons Paradox to illustrate that the demand for computing power continues to grow faster than efficiency gains would suggest.

Researchers at Simple Mining agreed with Hayes, stating that investments in AI infrastructure are a national security issue and are boosting the demand for Bitcoin.

Investment in artificial intelligence (AI) is now considered a matter of national security. The companies building large AI systems will eventually need to borrow money from banks to fund their growth, as their own profits won’t be enough. This bank lending will have a much bigger impact on the economy – about three times more – than if the central bank provided the funding directly. This leads to…

— Simple Mining (@simpleminingio) May 9, 2026

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Pentagon Deals Reinforce the Narrative

David Sacks, the White House advisor on AI and cryptocurrency, believes that investments in artificial intelligence will likely boost the US economy by around 2% this year.

Sacks cited a Morgan Stanley note suggesting the contribution could climb above 3% next year.

“Stopping progress in AI would be equivalent to halting the US economy,” he noted.

On May 1st, the government emphasized national security concerns by signing agreements with eight leading tech companies to deploy artificial intelligence. These companies are Google, Microsoft, Amazon Web Services, Nvidia, OpenAI, Reflection AI, SpaceX, and Oracle.

The US Department of War has contracted with eight tech companies – SpaceX, OpenAI, Google, Nvidia, Reflection, Microsoft, Amazon Web Services, and Oracle – to integrate artificial intelligence into secure military networks.

— Antonio Vieira Santos (@AkwyZ) May 1, 2026

Simon Dixon, a supporter of Bitcoin, believes the recent events were deliberately created to provide an excuse for printing more money.

According to the speaker, the growing US national debt will likely fund a future rescue package for artificial intelligence, with energy companies benefiting financially. They believe a crisis will be manufactured to justify the Federal Reserve buying bonds, and a compelling story about national security and competition with China in AI is being crafted to explain the emergency funding and direct where the money goes.

Bubble Risks and the Bitcoin Trade

Hayes doesn’t believe the current AI boom will last. He suggests a large AI company going public or merging with another could bring it to an end. Additionally, negative comments about AI from a potential Democratic candidate in the 2028 election could cause investors to pull back their money even sooner.

Increasing prices for things like electricity and everyday goods could lead to public anger as the US midterm elections approach in November.

Hayes anticipates traditional currency will continue to increase until the pending stimulus checks are distributed. He suggests Bitcoin hit its lowest point around $60,000 earlier in the year and now strongly believes it will likely reach $126,000 again.

He expects acceleration once the price clears $90,000 and short sellers are forced to cover.

Investors are keeping a close eye on spending related to artificial intelligence technology, decisions made by central banks, the performance of electricity markets, and new tech companies launching on the stock market – all to see if the current economic trend is about to change.

Until one of those signals appears, Hayes argues the path of least resistance for Bitcoin is up.

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2026-05-12 18:07