Bitcoin and ‘selected shitcoins’ will rise – Arthur Hayes explains why

BitMEX co-founder Arthur Hayes has come up with an argument that the AI debt problem is potentially bullish for Bitcoin [BTC], even though the underlying AI slowdown itself could be negative for technology companies.

In his latest essay titled “Safety First,” Hayes argues that slowing AI development could reduce demand for computing power, putting pressure on the huge debt financing AI data centers and infrastructure. 

Is weaker AI cash flow actually bad news for crypto?

Hence, he links this debt to private credit and insurance companies, warning that weaker AI cash flows could trigger credit downgrades and expose capital shortfalls in the insurance sector. Such a situation, according to Hayes, branches into two possible government responses.

First being that the US could become a “buyer of last resort” by guaranteeing demand for AI compute and supporting data-center investment, particularly if AI is viewed as strategically important in the competition with China.

Alternatively, if falling AI-related asset values create problems for insurers and other financial institutions, the government could intervene to prevent a broader financial crisis.

Yet, no matter the response, Hayes believes,