BTC has been under heavy pressure as it struggles to hold above $63,000. BitMEX co-founder Arthur Hayes argues that the recent AI investment boom absorbed a large portion of newly created dollar liquidity. According to Hayes, this diversion of capital helps explain why Bitcoin has not rallied more, despite broader expansion in the money supply.
In a recent blog post, Hayes reiterated his long-standing view that cryptocurrency markets are driven largely by fiat liquidity, but he also admitted he may have underestimated where that liquidity was flowing.
Bitcoin vs. AI
Given the surge in dollar creation over recent years, Bitcoin might have been expected to perform better. Instead, a disproportionate share of capital poured into AI-related investments. Hayes points to the commercial launch of ChatGPT in November 2022 as the start of what he calls the “great AI bubble.” During the same period, Bitcoin recovered from post-FTX lows and climbed from roughly $15,000 to about $125,000 by October 2025.
Despite that recovery, AI-linked equities outpaced crypto by a wide margin. Hayes highlighted Nvidia’s approximately 11x increase compared with Bitcoin’s roughly 7x gain over a similar timeframe. He also noted that AI’s relative outperformance accelerated from late 2024 onward, while Bitcoin later retraced sharply from its peak.
Hayes said his earlier models emphasized the headline figures for fiat creation and assumed a sufficient portion of that liquidity would eventually reach Bitcoin. That assumption, he now believes, failed to account for the enormous capital demands of the AI industry.
The former BitMEX CEO described AI as an unusually capital-intensive sector, one that requires huge investments in data centers, electricity generation, specialized chips, and related infrastructure. He pointed to a rapid expansion of data center spending beginning in 2024 and accelerating in 2025, which created an immense need for financing.
Drawing on estimates from public disclosures, Hayes said that AI-related firms issued roughly $1.5 trillion in debt between November 2022 and the present. Of that total, about $1.3 trillion was raised from 2025 onward as spending on AI infrastructure surged.
He compared that figure to growth in the US M2 money supply over the same period, which he also estimated increased by roughly $1.5 trillion. From those numbers, Hayes concluded that AI effectively absorbed nearly all newly created dollar liquidity, writing, “AI sucked up all created dollars.”
More Turbulence Ahead?
These observations arrive amid continued caution from some analysts about Bitcoin’s near-term prospects. Market analyst Doctor Profit recently suggested that Bitcoin has entered the fifth stage of a six-stage bear market cycle—a phase marked by heightened volatility and emotional strain for investors.
Doctor Profit argued that the recent pullback is not the cycle’s final bottom but rather a setup for further turbulence. He identified the $40,000–$48,000 range as the most likely area for Bitcoin’s eventual cycle low, potentially occurring between September and October 2026.
Investors tracking these developments will be watching capital flows into AI infrastructure, broader liquidity measures, and signs of renewed appetite for crypto assets. The interaction between macro liquidity trends and sector-specific capital demand—particularly from AI—could continue to shape Bitcoin’s trajectory in the months ahead.