Why Didn’t Bitcoin Go Higher? Arthur Hayes Blames the AI Spending Frenzy

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.

The former BitMEX CEO described AI as an extremely capital-intensive sector that requires vast investments in data centers, electricity generation, specialized chips, and supporting infrastructure. He explained that the rapid expansion of data center spending that began in 2024 and accelerated in 2025 created a massive need for financing.

Referring to estimates compiled from public disclosures, he said AI-related firms issued approximately $1.5 trillion in debt between November 2022 and the present. Of that total, around $1.3 trillion was raised from 2025 onward as spending on AI infrastructure surged.

Hayes compared that figure with growth in the US M2 money supply over the same period, which he estimated also increased by around $1.5 trillion. Based on those numbers, he concluded that AI effectively absorbed nearly all newly created dollar liquidity. He wrote,

More Turbulence Ahead?

The latest concerns come as some analysts remain cautious about the cryptocurrency’s near-term outlook. Market analyst Doctor Profit recently said that bitcoin has entered the fifth stage of a six-stage bear market cycle, a phase characterized by increased volatility and emotional stress for investors.

He said that the recent pullback was not the final bottom but a setup for further turbulence ahead. The analyst flagged the $40,000-$48,000 range as the most likely area for BTC’s eventual cycle low, potentially between September and October 2026.

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