Arthur Hayes says Bitcoin’s climb to $1 million depends on the AI industry’s credit problems, not its earnings.In a new essay titled “Situationship,” the BitMEX co-founder makes his case.

He argues that AI data center spending resembles 2008-style debt speculation rather than 2000-style dot-com overvaluation. He expects central banks to print enough money to eventually rescue over-leveraged AI lenders. That flood of liquidity, he says, is what carries Bitcoin toward seven figures.

Why Hayes Separates AI From the Dot-Com Bubble

Hayes argues investors mistake data centers for pure technology. In his view, they are really real estate developments packed with fast-depreciating chips.

He made a related case in May. Back then, he called AI spending history’s largest fiat credit bubble and set an initial Bitcoin price target near $126,000.

“AI CAPEX is just another boring real estate play”
— Arthur Hayes,

In his view, hyperscalers increasingly fund data centers with borrowed money, not free cash flow. That shifts default risk onto banks and bondholders.

He compares this to the 2006-2008 mortgage cycle. Lending kept flowing even after home price growth stalled. It only broke once construction spending actually contracted.

The Bailout Mechanism Behind the $1 Million Call

Hayes expects AI capital spending growth to decelerate in 2027. That slowdown, he says, will expose the weakest data center loans. He argues the Fed and Treasury will respond the way they did in 2008 and 2020. That means emergency lending facilities, and possibly direct equity purchases, to prevent a systemic default.

His forecast follows a familiar pattern from the Fed. Chair Kevin Warsh held interest rates steady at his second meeting in late July. Three FOMC members dissented, favoring a hike. Markets now price high odds of a rate hike later this year.

Hayes reads that hold as evidence authorities will keep credit flowing. He sees continued bank lending to AI projects as further confirmation officials won’t let weak borrowers fail.

This isn’t Hayes’s first seven-figure Bitcoin call. He made a similar $1 million prediction last year based on an expected Fed shift toward yield curve control.

This time, he ties the call to AI credit stress instead. He also reiterated a $5,000 Ethereum target for the end of 2026. Hayes points to Ethereum’s emerging role as a settlement layer for tokenized real-world assets.

Bitcoin traded near $64,300 at the time of writing, up roughly 1% over 24 hours, per BeInCrypto data.

Hayes has also called for a Bitcoin bottom near $40,000 before any run toward his higher targets. That framework leaves room for further downside first. Whether the AI credit cycle actually unwinds on his 2027 timeline remains the open question. Investors will likely watch hyperscaler earnings and bank loan books for early signs over the coming quarters.

Source: BeInCrypto