Arthur Hayes, the former CEO of BitMEX, is warning that the massive spending on artificial intelligence infrastructure is creating a credit bubble reminiscent of the 2008 housing market. He predicts a contraction in 2027, followed by government bailouts and liquidity injections that could send Bitcoin to $1 million or higher.
The AI bubble thesis
Hayes argues that the current frenzy around AI data centers and computing power is being fueled by cheap credit, similar to the subprime mortgage boom. He expects a sharp correction in 2027 as these investments fail to generate expected returns, prompting central banks and governments to step in with stimulus. That, in his view, would be a massive tailwind for Bitcoin.
Bitcoin's current position
Bitcoin was trading around $64,000 at the time of writing, up from a recent low near $62,000. But it's still 49% below its October 2025 all-time high of approximately $126,000. Hayes notes that Bitcoin may not have reached its cycle low yet — he sees it trading between $60,000 and $70,000 in the near term, with a possible downside to $50,000. The recent recovery has been helped by easing geopolitical tensions, including reports of a potential interim agreement between the US, Iran, and Oman regarding the Strait of Hormuz.
Ethereum's tokenized asset play
Hayes also sees potential for Ethereum, which he says could benefit from growing institutional interest in tokenized real-world assets. He suggests ETH could reach $5,000 by the end of 2026.
What to watch
The key question is whether the AI spending boom will indeed lead to a credit event. Hayes' timeline points to 2027. For now, Bitcoin remains range-bound, and the market is watching for any signs of a deeper correction or a catalyst that could break it out of the $60k-$70k band. The potential US-Iran-Oman agreement could further ease geopolitical risk, but the AI bubble narrative will likely keep traders on edge.
