BitMEX co-founder Arthur Hayes has predicted a surge in Bitcoin (BTC) prices, citing emerging macroeconomic factors. This follows a similar analysis from industry leaders on the impact of artificial intelligence (AI) on Wall Street.
AI-Job Losses To Drive Next Market Uptick
According to Hayes, Bitcoin’s and tech stocks’ divergence will trigger a credit crisis, forcing central banks into panic mode. If this happens, it is expected that central banks will print more money, which will naturally flow into Bitcoin and other risky assets.
Recently, both markets have been closely related, with experts predicting price direction based on fundamentals. The commingling of Bitcoin and stocks was largely driven by institutional investors, who have declined in the last four months.
For Hayes and other analysts, recent divergence could lead to a meltdown, sounding the alarm on an incoming credit destruction. He explained that Bitcoin is the fiat liquidity fire alarm because it’s the most responsive traded asset in line with the credit supply.
“The divergence recently between Bitcoin and the Nasdaq 100 Index (“Nasdaq”) sounds the alarm that a massive credit destruction event is nigh. Many investors perceive Bitcoin, because of its past correlation with US big tech stonks, as a leveraged play on the Nasdaq. Therefore, when they diverge in performance, it warrants further investigation into any trigger…”
Going further, he pointed out that the AI frenzy is affecting tech jobs. Job losses caused by massive AI adoption will trigger a debt crisis, he added, citing recent job-cut data over the past two years. Mass job slashes will spiral into mortgage losses and ultimately lead the central bank to make shocking changes.
Per the note, the AI financial crisis will trigger a money-printing machine. This would come after regional banks and credit markets face tightening measures. Hayes expects the Fed’s pump to drive institutional and retail players into crypto as a natural effect, pushing prices to a new all-time high.
Last year, the spike in BTC’s price attracted new capital into spot ETFs and later into crypto treasury firms, pushing the asset to multiple all-time highs. Aside from Bitcoin’s possible recovery, altcoins are also in the mix for a rebound if Hayes’ predictions are correct.
Historically, altcoins have shown a decent surge in sentiment after a gradual Bitcoin rally. However, this would not lead to an altcoin season through redistribution, as investors will favor Bitcoin when allocating funds to risky assets.
Source: https://zycrypto.com/arthur-hayes-projects-potential-bitcoin-blowup-from-ai-induced-credit-crisis/
