Arthur Hayes Says AI Boom Is Holding Back Bitcoin Rally

Bitcoin has struggled to respond to expanding liquidity as investor capital has flowed into artificial intelligence rather than digital assets, according to BitMEX co-founder Arthur Hayes.

Speaking in an interview with Bonnie Blockchain, Hayes said the surge in AI-related spending has absorbed the market’s marginal investment capital, limiting Bitcoin’s ability to rally despite ongoing money creation.

Hayes argued that investors are increasingly allocating funds to AI technology companies and businesses across the sector’s supply chain. He added that individuals who have accumulated wealth through the AI boom are more inclined to purchase hard assets or diversify into NASDAQ-listed stocks rather than increase their exposure to cryptocurrencies.

Looking ahead, Hayes warned that a sharp downturn in AI equities could also weigh on the digital asset market. He said cryptocurrencies would likely decline alongside technology stocks in the initial phase of a broader selloff.

According to Hayes, crypto assets’ around-the-clock trading makes them a readily available source of liquidity during periods of market stress. Investors facing margin calls could be forced to liquidate cryptocurrency holdings to raise cash before markets stabilize and capital begins to differentiate between stronger and weaker assets.

Source: Bonnie Blockchain