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Arthur Hayes warned of an AI-driven credit shock, claiming that Bitcoin could fall below $60,000, while also predicting that a resumption of large-scale liquidity injections could push the cryptocurrency to new all-time highs.
According to crypto-focused outlet CCN on February 18 (local time), former BitMEX CEO Arthur Hayes suggested in his essay “This Is Fine” that Bitcoin (BTC) could drop below $60,000. He likened the recent decoupling between Bitcoin and the Nasdaq 100 index to a “global fiat liquidity fire alarm,” arguing that a large-scale credit destruction event may be imminent.
Hayes presented two scenarios. One assumes that the decline from $126,000 to $60,000 has already absorbed most of the correction. The other envisions further downside for Bitcoin as equities and credit markets undergo broader repricing. If widespread liquidity tightening occurs, investors could dump risk assets across the board, causing Bitcoin to trade sideways below $60,000 or fall even further. However, he added the caveat: “until the Federal Reserve starts printing money again.”
He also pointed to Bitcoin’s weakness relative to gold as evidence of emerging deflationary risks. While gold has shown strength, Bitcoin has struggled, signaling that markets are pricing in a risk-off environment. Noting that many investors have viewed Bitcoin as a leveraged bet on the Nasdaq, he stressed that the divergence between the two assets should serve as a warning sign to reassess deteriorating credit conditions.
Hayes identified AI-driven displacement of white-collar jobs as a potential catalyst for the credit shock. He estimated that if 20% of approximately 72 million knowledge workers are replaced by AI, significant losses could materialize in consumer credit and mortgage markets. Of the $5.1 trillion in outstanding U.S. consumer credit—excluding student loans—he estimated bank exposure at around $3.76 trillion. Assuming an average mortgage balance of $250,000, potential losses could reach about $330 billion in consumer credit and roughly $227 billion in mortgages, amounting to a write-down of approximately 13% of U.S. commercial bank equity capital.
Nevertheless, he argued that such a deflationary shock could paradoxically become a medium- to long-term bullish factor for Bitcoin. If central banks respond with large-scale liquidity injections to stabilize the financial system, expanded fiat credit creation could drive Bitcoin sharply higher from its lows. Hayes acknowledged that volatility may increase in the short term but predicted that, following policy intervention, Bitcoin could reach a new all-time high.
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