Arthur Hayes argued on Tuesday that Bitcoin cannot rally until the AI bubble pops, asserting that the artificial intelligence sector has absorbed all new liquidity that could have flowed into cryptocurrencies. Hayes laid out the core math in his essay, noting that US M2 rose by $1.5 trillion between November 2022 and today. Over the same period, AI companies issued roughly $1.5 trillion in debt to fund data center construction. The numbers match almost exactly, meaning AI absorbed every dollar of new liquidity before it could find its way into Bitcoin.

"Bitcoin never had a chance," Hayes wrote. "The only reason Bitcoin rallied strongly off the November 2022 low is that the AI debt binge really kicked into gear starting in 2025." Bitcoin peaked in October 2025 precisely as AI capital expenditure reached previously unimaginable heights.

Catalysts to Pop the AI Bubble

Hayes identified three catalysts that he believes will deflate AI stocks. First, rising oil prices from the Iran war directly compress AI model company margins since data centers run on electricity generated from natural gas. Second, SpaceX, Anthropic, and OpenAI are collectively raising more capital than all dot-com IPOs combined, and Hayes argues the float expansion between now and September virtually guarantees market disappointment. Third, Trump may adopt anti-AI rhetoric to win undecided voters ahead of November midterms, similar to a Korean politician's comments that sent the Kospi nearly limit down before the government walked it back.

"Can the AI complex continue to rip at $150 oil? Doubtful," Hayes wrote. He now holds large positions in US energy producers as a direct hedge against rising hydrocarbon prices under both a deal and no-deal scenario with Iran.

Portfolio Adjustments

Hayes sold HYPE, NEAR, WLD, and ZEC last week, explaining that when AI stocks fall rapidly, investors cannot buy crypto even if it outperforms on a relative basis. He kept Bitcoin and Ethereum, arguing that once the AI bubble pops it will trigger a financial crisis that forces a large monetary expansion, which historically benefits Bitcoin.

"I am confident that Bitcoin will dump then pump," Hayes stated. He plans to revisit markets in early September, leaving open the option to buy back at higher or lower levels after the dust settles.

Bitcoin is holding $63,000 as optimism around a potential peace deal in the Middle East fuels positive social sentiment, alongside gains in major altcoins like Ethereum and XRP. The global cryptocurrency market capitalization stands at $2.17 trillion, reflecting an increase of 1.98% from the previous day, despite recent volatility and outflows from spot exchange-traded funds (ETFs).

Market Performance

The following table details the performance of major cryptocurrencies:

Market Statistics and Flows

Coinglass data shows 108,898 traders were liquidated in the past 24 hours for $284.06 million. SoSoValue data indicates net outflows of $19.03 million from spot Bitcoin ETFs on Thursday, while spot Ethereum ETFs saw net outflows of $15.9 million. In the past 24 hours, top gainers include Humanity, OFFICIAL TRUMP and Audiera.

Technical Analysis and Outlook

Trader Byzantine General explained that Bitcoin is testing the $64,000-$65,000 resistance zone for a third time, signaling persistent bullish pressure. However, a large amount of passive sell liquidity on Binance remains overhead. CryptosBatman noted Bitcoin is forming a classic inverse Head & Shoulders pattern beneath a descending resistance trendline, with buyers defending higher lows. Trader Jelle is watching Bitcoin's weekly close, which is on track to confirm a bullish divergence on the weekly chart while holding a critical support zone.