Arthur Hayes Explains Why Bitcoin Failed to Go Higher

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Hayes believes that AI's growing demand for capital has become a major headwind for bitcoin.

BTC has been under tremendous pressure as it struggles below $63,000. Arthur Hayes said he believes the AI boom has absorbed a significant portion of newly created dollar liquidity, which, according to the BitMEX co-founder, explains why bitcoin has struggled to rally further despite a broader expansion in money supply.

In a recent blog post, Hayes revisited his long-held belief that crypto markets are largely driven by fiat liquidity and acknowledged that he may have overlooked an important factor: where that liquidity was actually flowing.

Bitcoin vs. AI
Bitcoin should have performed much better given the increase in dollar creation over the past few years, but instead AI-related investments attracted a larger share of capital. The commercial launch of ChatGPT in November 2022 was the beginning of what Hayes called the “great AI bubble.” During the same period, bitcoin recovered from its post-FTX lows and rose from roughly $15,000 to around $125,000 by October 2025.

However, AI-linked stocks significantly outperformed crypto. Hayes cited Nvidia’s roughly 11x increase compared to BTC’s 7x gain over a similar timeframe. He also observed that AI’s outperformance accelerated from late 2024 onward, while bitcoin later declined sharply from its peak.

Hayes said his previous models focused mainly on the headline amount of fiat creation and assumed that enough of that liquidity would eventually find its way into bitcoin. But this approach failed to account for the enormous capital demands created by the AI industry.

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