Maelstrom founder Arthur Hayes says the AI boom is a credit bubble.

Once it unwinds, governments will print enough money to send Bitcoin (CRYPTO: BTC) to $1 million.

Why Hayes Says AI Is A Credit Bubble, Not A Tech Bubble

Hayes argued in a Substack essay on Wednesday that the dot-com crash was an earnings story because companies had no revenue. 

The 2008 crisis was a credit story because lenders poured money into property that stopped appreciating. AI, he argued, is the 2008 version.

Hyperscalers are building data centers, which are fundamentally real estate projects, not technology ventures. 

Lenders are treating that debt as if they are funding Apple (NASDAQ:AAPL) rather than Lehman Brothers. 

When AI capital expenditure growth decelerates in 2027 and contracts in 2028, the weakest credits fail and the government steps in with a bailout larger than anything seen after 2008.

Where Bitcoin Fits Into The Timeline?

Hayes said Bitcoin has already bottomed or is very close, with the asset likely sideways between $60,000 and $70,000 near term and potential downside to $50,000. 

The AI credit expansion is already misallocating capital on a scale comparable to the US railroad boom as a percentage of GDP, meaning the eventual bailout will dwarf the trillions printed after the financial crisis.

Bitcoin was created as a direct response to that 2008 bailout. This time it already exists and is positioned to absorb the liquidity wave directly.

Why Hayes Is Buying Ethereum Over Bitcoin Right Now?

Hayes said Maelstrom is heavily long Bitcoin but sees Ethereum (CRYPTO: ETH) as the next trade, targeting $5,000 by year-end, roughly 2.6 times current levels. 

His thesis is that corporate chains like Robinhood Markets (NASDAQ:HOOD) are building on Arbitrum, an Ethereum Layer 2, making Ethereum the security settlement layer for tokenized real-world assets. 

He cited Bitmine Immersion Technologies Inc (NASDAQ:BMNR) Chairman Tom Lee’s institutional backing as providing cover for portfolio managers to build ETH positions around the tokenization theme.

Why The Fed Is The Wildcard?

Hayes pointed to the Fed’s decision to hold rates last week as evidence the government is already engineering a steeper yield curve to make bank lending more profitable. 

He said banks are directing capital toward AI lending, and when those loans sour, governments will step in with a bailout that arrives quickly and at a scale the market is not prepared for.

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