BitMEX Founder Arthur Hayes Exits All Altcoins, Warns AI Bubble Could Trigger Crypto Crash

TLDR

• BitMEX co-founder Arthur Hayes has liquidated his entire altcoin portfolio, including positions in NEAR, Hyperliquid, and Worldcoin
• Hayes contends the artificial intelligence investment surge represents an unsustainable bubble likely to collapse between 2027-2028
• He cautions that Bitcoin will not serve as a refuge during the AI trade unwinding and may experience significant declines
• Hayes anticipates central bank monetary expansion following the AI crash will ultimately propel Bitcoin toward $1 million
• His current strategy involves holding only Bitcoin for the long term while parking cash in US Treasury Bills

Arthur Hayes, the co-founder of cryptocurrency exchange BitMEX, has liquidated his entire altcoin portfolio and is sounding the alarm that the ongoing artificial intelligence investment boom could severely impact cryptocurrency markets when it inevitably collapses.

Hayes shared these perspectives during a recent Bankless podcast episode and in subsequent interviews, outlining his thesis that AI has diverted substantial capital from cryptocurrency markets and that the reversal of this capital flow will have painful consequences for digital assets.

Complete Altcoin Exit

Hayes disclosed that he has completely exited his holdings in Near Protocol, Hyperliquid, and Worldcoin, among other altcoins. According to Hayes, the risk profile of these positions had begun to exceed their potential reward.

He characterized his present investment stance as “permanently Bitcoin long,” while maintaining his fiat reserves in US Treasury Bills to generate yield.

His departure from AI-related cryptocurrency tokens is being interpreted by market participants as a significant bearish indicator. Since Near Protocol and Worldcoin both operate at the intersection of artificial intelligence and blockchain technology, abandoning these positions signals Hayes expects the broader AI-crypto narrative to collapse rather than simply shift.

Hayes also indicated he would allocate any fresh capital toward Ethereum instead of Bitcoin, describing it as offering better value and more compelling risk-reward dynamics at present valuations.

The Coming AI Collapse

Hayes drew parallels between the current AI investment mania and the 19th-century railroad speculation bubble. He argued that corporations are operating under faulty assumptions regarding chip longevity, projecting five to six-year useful lives for hardware that becomes obsolete within two years.

He forecasts this miscalculation will severely impact financial markets by 2027 or 2028, potentially triggering a credit crisis exceeding the 2008 subprime mortgage meltdown in magnitude.

Hayes identified three critical vulnerabilities. First, escalating energy expenses undermine the profitability frameworks of AI enterprises. Second, United States regulatory policy toward AI companies could shift abruptly and adversely. Third, the anticipated public offerings of Anthropic and OpenAI will consume massive amounts of institutional capital, siphoning funds away from cryptocurrency and other speculative asset classes.

According to Hayes, AI has essentially suffocated capital flows into crypto. Investors pursuing AI equities capable of delivering 20x returns within six months have minimal incentive to allocate toward Bitcoin.

Bitcoin Won’t Provide Shelter

Despite maintaining a bullish long-term outlook on Bitcoin, Hayes cautioned it will not remain insulated should the AI investment thesis unravel. He predicted Bitcoin would be “thrown out with the bathwater” during a widespread risk-off market event.

His projection holds that central banks will respond to an AI sector collapse by implementing aggressive monetary expansion. This newly created liquidity, Hayes contends, will ultimately find its way into Bitcoin since it cannot be redeployed into an AI sector that has already imploded.

This scenario represents Hayes’s roadmap to Bitcoin achieving a $1 million valuation. However, his outlook includes navigating through a severe downturn first.

AI-themed assets have been capturing capital even within cryptocurrency markets. AI-associated BRC-20 NFTs generated $17.8 million in weekly sales volume recently, demonstrating how the AI investment narrative has redirected attention and capital away from layer-1 tokens and decentralized finance protocols.

Hayes has exited this trade entirely. Whether other market participants will follow his lead before the cycle peaks remains an open question.