Arthur Hayes Says AI Spending Boom Is ‘Lehman, Not Apple’ – Sees Bitcoin Eventually Hitting $1M

AI is pulling liquidity, and concerns over Strategy are weighing on sentiment, Arthur Hayes said, which could push Bitcoin down before pushing it up.

• Arthur Hayes said the AI boom is a credit bubble, with risk concentrated in overleveraged AI infrastructure debt.
• He expects the bubble to burst around 2027-2028 and will eventually send Bitcoin to $1 million.
• Hayes said he remains bullish on Ethereum, forecasting it to reach $5,000 by the end of 2026.

Arthur Hayes said the race to build AI infrastructure may be a starting point for Bitcoin’s (BTC) next parabolic rally. The BitMEX co-founder argued that the current AI spending boom is paving the way for a dangerous credit bubble that could burst in the next few years, forcing governments to inject trillions into financial markets – a wave of liquidity he expects will eventually send Bitcoin to $1 million.

In his latest essay, “Situationship,” published on Tuesday, Hayes argued that AI capital expenditure is “just another boring real estate play” that is mispriced by markets, with lenders treating data centers and power plants as financing “like lending to Apple, instead of lending to Lehman Brothers.”

Why Hayes Think That The AI Bubble Is A Credit Bubble

According to Hayes, the bubble will burst when data center construction growth slows, or hyperscaler forward guidance decelerates, putting pressure on the balance sheets of the most-leveraged holders of AI-related debt. He estimates that the announced pace of capital expenditure buildout will start to moderate in the mid-to-late 2027 time frame, with the moderation becoming evident by 2028.

"Leading AI companies will continue to earn massive profits, but the forward multiples will contract and cause solvency issues for the weakest AI credits," Hayes wrote.

Bitcoin Bottom Forming

Hayes predicts that China and the United States will eventually step in to bail out over-leveraged AI companies and their financiers on national security grounds. The total funds injected for this purpose will exceed the trillions of dollars in rescue packages rolled out after the 2008 global financial crisis, said Hayes. 

In the short term, Hayes added, Bitcoin will consolidate in the range of $60,000 to $70,000, with a possible low of $50,000 before hitting a bottom. The market needs to digest concerns over Strategy (MSTR) selling its Bitcoin holdings, as the company’s ability to issue shares to purchase more. 

Bitcoin has weakened sharply, he added. Over the long term, Bitcoin will peak in October 2025 at twice its previous all-time high. It will then drop by 50% as liquidity is drawn into the AI sector. A reversal of liquidity flows in mid-2026 will support Bitcoin in hitting a bottom and rebounding.

Bitcoin’s price was trading at $64,012, up 0.7% in the last 24 hours. On Stocktwits, Bitcoin was one of the top trending tickers. Retail sentiment around BTC remained in the ‘bearish’ zone, accompanied by ‘normal’ chatter levels over the past day.

Ethereum Still A Favorite – Target Of $5,000

Hayes proposed that the price of Ethereum (ETH) will rise to $5,000 by the end of 2026, calling it "the most overlooked and forgotten” large-cap cryptocurrency token. He predicted that Ethereum will become the settlement layer for tokenized capital markets. His family office, Maelstrom, currently holds a large amount of Bitcoin and also plans to profit by staking on Ethereum. Last month, Hayes predicted that Ethereum would reach $100,000 to $200,000 at the peak of the next cycle.

Ethereum’s price was trading at $1,863, up 0.3% in the last 24 hours. On Stocktwits, retail sentiment around ETH remained in the ‘bearish’ zone, accompanied by ‘normal’ chatter levels over the past day.

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