I’m out of Markets Until… | Arthur Hayes

**Ran Neuner** (0:02)
I woke up this morning, and the first thing I saw was that Arthur Hayes had dropped a brand new substack, right? I don't know if you ever read one of these Arthur Hayes substacks, but let me tell you, they start off slow, and as you get into them, you get into this rabbit hole which digs into altcoins, Bitcoin, political situation, AI, and everything else that's got to do with it. So I thought today what we'd do is actually get Arthur Hayes on the show. And before I actually start the show and get Arthur on, I actually just want to read you one little part of the substack, I think it'll put everything into perspective. And it reads something like this, it says, Bitcoin cannot rally in the short term if the entire world takes serious losses from deflation of the AI bubble globally. Eventually it will bottom, then rise as Bitcoin forecasts an increase in liquidity to put Humpty Dumpty back together again. But right now, it's all about protecting one's crypto capital. So if that doesn't set the tone for what we're about to talk about, then let me spell it out for you. We're gonna talk about AI and whether AI can, is about to deflate. Is AI gonna crash?
And that's because one of the things we have this week is we have the SpaceX IPO coming up. Is it gonna drain liquidity from the markets? What is going to happen? What else could drain the AI bubble? What is gonna happen? And when is the Fed actually gonna start printing capital? That's what we're gonna talk about. And I've got Arthur with me all the way from Bangkok. How are you, my friend?
Great.

**Arthur Hayes** (1:18)
How are you doing?

**Ran Neuner** (1:19)
Man, I had this whole interview with you planned out, and then I woke up this morning, and there was another sub-stack, and it was like, wow, we're going down a big, big, big, big, big rabbit hole today.

**Arthur Hayes** (1:30)
Great. Let's go.

**Ran Neuner** (1:31)
All right, let's go. So let's start. I mean, I guess we're gonna talk about all the things that you mentioned. We're gonna talk about how, like, the Fed, I mean, I guess from what you're saying, what you're saying here, I guess what you're saying is the AI bubble is going to collapse at some point in time.
We'll talk about whether it's pretty soon or not. And until the AI bubble collapses, we don't see a world where Bitcoin actually rises because only the collapse of the AI bubble is going to give us the liquidity that we need for Bitcoin to actually run. Is that pretty much the outline for the Bitcoin thesis?

**Arthur Hayes** (2:02)
Yeah, and I went back and I challenged my process that got me to this conclusion of thinking that there was abundant liquidity in Bitcoin should rise. And obviously I was wrong about that. From October of last year to the present, Bitcoin is down 50%, yet bank laying the AI is up. There's been money creation, especially in the United States. So why has Bitcoin not done so well? So I said, okay, let me figure out, where did the money go?
I think it went to AI. So I went up for Plexity and I asked it, can you give me an estimate of how much debt was issued in various forms to AI or AI-adjacent companies from the start of CHATTPT commercialization, November 30th, 2022, that's how the president...
The headline number is about $1.5 trillion, is the estimate, versus $1.5 trillion of global US dollar M2 increase. Again, very rough numbers. It's not probably to be 100% correct. It's more about the directionality and getting the magnitudes right. So at a high level, all the money went to AI, and therefore Bitcoin didn't get any love from all this printed money. Now, obviously, that's not the case, because Bitcoin rallied from the FTX lows in November 2022 to the present, like up 7X. But the reason why it was able to rally, even though AI is sucking all this capital, is the intensity at which AI demanded capital and the dollar and other terms increased dramatically starting in 2025 So from 2025 to 2026, the present of $1.3 trillion of debt has been issued out of $1.5 trillion. So this is why Bitcoin had the ability to rise as AI was just revving up in terms of its suction of all fiat capital around the world. And so if that's the premise, then as long as the AI mobile is going, that's what you're investing in. Because you can look, you know, Korea, Taiwan, Japan, America, pick your stock that's in the sort of the AI stable. Suddenly things are up like 50X in 12 months.