Bitcoin (BTC) Set for $126K Rally as Hayes Cites AI Spending and Geopolitical Tensions

Key Takeaways

• BitMEX co-founder Arthur Hayes forecasts Bitcoin reaching $126,000 in the current cycle
• The prediction centers on artificial intelligence expenditure, Middle East conflict, and worldwide monetary expansion
• According to Hayes, Bitcoin established a floor at $60,000 and has already surpassed gold’s recent performance
• The $90,000 threshold represents a critical breakout point that could trigger accelerated upward momentum
• Hayes’ fund Maelstrom is adopting maximum risk exposure with positions in HYPE, ZEC, and NEAR

Arthur Hayes, who co-founded BitMEX and currently serves as chief investment officer at cryptocurrency hedge fund Maelstrom, released a comprehensive analysis on May 12 declaring that Bitcoin’s bullish cycle has commenced.

In his essay titled “The Butterfly Touch,” Hayes outlined his thesis that three converging dynamics — infrastructure investment in artificial intelligence, military engagement between the United States and Iran, and a worldwide pivot away from dollar-denominated holdings — are compelling nations toward accommodative fiscal policy and expanded currency creation.

Bitcoin has oscillated within a range of $79,467 to $82,496 throughout the previous week, per CoinGecko data. The digital asset was trading near $81,000 on Wednesday, representing a gain exceeding 31% from its February 6 bottom of $62,822.

Hayes contends this recent strength relative to gold — which appreciated approximately 2% during the comparable timeframe — demonstrates Bitcoin’s responsiveness to the evolving political landscape surrounding monetary creation.

Artificial Intelligence Competition Positioned as Monetary Expansion Driver

Hayes characterized artificial intelligence development as a critical national security imperative for both the United States and China. Given this reality, he contends neither nation can maintain restrictive monetary policy while its rival aggressively finances AI infrastructure.

He noted that AI investment is penetrating the credit system, compelling financial institutions and central banks to facilitate spending on server farms, power generation, and computational resources. Hayes referenced the Jevons Paradox alongside the “Red Queen Effect” to support his position that AI expenditure creates a self-perpetuating cycle — reduced costs for intelligence generate increased demand, necessitating additional capital deployment.

$90,000 Identified as Critical Threshold

He highlighted $90,000 as a pivotal level where options sellers might face forced position liquidations, potentially catalyzing sharper price appreciation.

He indicated that Maelstrom would adopt “maximum risk” positioning unless circumstances shift substantially.

Hayes further suggested that nations previously allocating capital to US Treasury securities may redirect resources toward military capabilities, energy infrastructure, and tangible development projects — providing American policymakers with justification to maintain loose financial conditions. He referenced potential dollar exchange facilities and relaxed banking capital requirements as probable policy instruments.

Hayes concluded his analysis by disclosing Hyperliquid’s HYPE token and Zcash’s ZEC as substantial current holdings, while identifying NEAR as his preferred next allocation.

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