Arthur Hayes, CIO of crypto-focused Maelstrom Fund, believes the AI bubble will eventually burst, and it will be uber bullish for Bitcoin.
In a recent interview with Luke Martin, Hayes said,
AI is a waste of money. The bigger the AI bubble grows, the bigger the bailout will be, and the higher Bitcoin goes.
According to him, Anthropic, OpenAI, and SpaceX are all backed by the U.S government, but none of them makes money. Hayes foresees a “perfect time for crypto” if the AI bubble bursts.
Put simply, the bailout will mean more government money printing, higher inflation, and investors fleeing to stores of value (SoV) such as gold and Bitcoin. This is popularly known as the debasement trade.
Interestingly, BTC showed resilience this week and defended $80K despite a 2x-5x broader sell-off across AI/chipmakers and tech stocks.
AI bubble: Bitcoin upside meets quantum risk
Delphi Research and Fidelity echoed a similar bullish outlook. For his part, Ceteris Paribus, the pseudonymous Head of Research at Delphi, noted,
Getting quite bullish internet monies. Debasement from current debt situation + AI Ponzi bailout equal BTC flows.
An AI bailout will likely add to U.S fiscal debt and growing investors’ concerns. For perspective, U.S fiscal debt currently stands at $40.3T and is growing regardless of which party is in office.
This has since triggered rising bond yields. According to Fidelity, this could worsen the U.S debt situation and further make the case for BTC.
The asset manager also said that the correlation between BTC and 10-year bond yields hit a record high of 0.6 in 2026. The yields rose by 10% in the past two months, and BTC surged by +30% over the same period.
In other words, rising bond yields will likely send BTC higher if the correlation extends.
If current debt and rate trends persist, it may not be long before the interest expense becomes the largest line item in the federal budget, further elevating focus on alternative stores of value
Still, Bitcoin’s quantum threat is intensifying with AI advancement and Google’s breakthroughs in quantum computers. For Ceteris, this could cap the expected BTC upside from the debasement trade.
I think BTC will do quite well, but it won’t be the only SoV in the arena like it was a few years ago. Debasement bullish, but quantum will keep a cap on upside.
In the meantime, U.S Spot BTC ETFs bled another $228M this week, marking the second week of outflows in October. Still, this week’s capitulation showed cooling profits that may mark another bottom at $80K, as per Glassnode.
Final Summary
- AI bubble burst, and a likely bailout could trigger a debasement trade-driven BTC rally.
- Delphi Research cautioned that BTC’s upside could be capped by quantum risk.
