Arthur Hayes: Ai Dry Market, Bitcoin at the end of the year

Collapse & Compiled: Deep tide TechFlow

Guest: Arthur Hayes, BitMEX Alliance

Moderator: Kyle Chasse, Master Ventures CEO

Podcast source: Kyle Chasse crypto

Original title: Arthur Hayes: Bitcoin's Final Dump Before The Pump

Date broadcast: 10 June 2026

Summary of highlights

Arthur Hayes cleared his largest encryption positions - HYPE, NEAR, Worldcoin and Zcash - for reasons other than encryption itself, but rather a macro-drive chain ranging from oil prices, the Iranian war, the Tromp medium-term electoral strategy to the bursting of the AI bubble. He argued that Trump might reverse his position against the AI industry in order to recover the mid-term election disadvantage, and that once the AI bubble peaked, the encryption market could not be left alone; SpaceX, valued at $1.8 trillion, 100 times the market ratio, was, in his view, a mobile time bomb that was detonated sooner or later。

Summary of outstanding views

Why did you clear everything

• "The voters don't like high oil prices, energy-driven inflation."
• "The higher the price of oil, the more eager you are to negotiate, and then the lower the price, suddenly no one wants to agree."

TRUMP TURNED AGAINST AI

• "IF HE WANTS TO TURN A RABBIT OUT OF HIS HAT, THE ONLY THING THAT CAN BE TURNED OVER IS AI, WHICH IS TAKING THE DEMOCRATS' MESSAGE FOR THE TIME BEING, TO PROTECT THE AMERICAN PEOPLE FROM AI, AND THEN EVERYONE FORGETS THAT IT WAS THE REPUBLICANS THAT FINANCED THIS."
• "THE MOST DEVASTATING THING ABOUT AI NARRATIVES IS TAXATION AND REGULATION."

New portfolio configuration

• "Most of my current assets are in the Treasury and the Energy Unit."
• "I'M NOT SAYING THAT AI WILL NOT CONTINUE TO GROW, BUT THAT THE MARKET'S WILLINGNESS TO PAY THE LONG-TERM MULTIPLES FOR THIS INCREASE WILL DECLINE, SO THE PRICES OF THESE ASSETS WILL FALL."

AI MATH OF CAPITAL EXPENDITURE BUBBLE

• "I TRADE WITH A SENSE OF MIND AND INSTINCT, NOT MUCH WITH ANALYSIS. I FEEL LIKE WE'RE AT SOME STAGE OF THE AI BUBBLE, I'M NOT SURE WHICH STAGE."
• " You can ' t value 100 times the sales of SpaceX or any AI company with both profit and capital expenditure slowing down. The point is how fast it grows, how fast it changes, and how much you feel about it."
• "WHEN YOU INVEST IN AI, YOU INVEST NOT FOR PROFIT, BUT FOR CAPITAL EXPENDITURE IN THE DATA CENTRE — YOU KEEP THE SECOND-ORDER GUIDE, THE ACCELERATION OR DECELERATION OF TRENDS. IF THE TREND IS ACCELERATING, YOU ARE WILLING TO PAY AN UNLIMITED DOUBLE OF THE VALUATION FOR FUTURE REVENUES; IF THE TREND IS SLOWING, YOU ARE NOT WILLING."
• "We have reached the scale of $80 billion in capital expenditure in 2026. By 2027, this second-stage guide will start slowing down -- you cannot pay SpaceX or any AI company 100 times the sales while both profits and expenditures are slowing."
• "There will always be conflicts between capital and labour, whether voluntarily or by force, and at some point there will be some kind of agreement."

WHY DID BITCOIN LOSE, AI

• " From the commercialization of ChatGPT to date, the U.S. M2 has increased by about $1.5 trillion, but AI and AI-related companies issued about $1.5 trillion in debt over the same period - 1.3 trillion of which were concentrated between 2025 and 2026. AI sucked all the excess liquidity away."
• "WHEN THE BUBBLE BREAKS, EVERYTHING BECOMES ONE-- AI FALLS, BITCOIN FALLS, ALL ASSETS FALL TOGETHER, AND CERTAIN ASSETS WILL NOT START TO WIN UNTIL THE DUST IS SETTLED."
• "IN THE NEXT SIX MONTHS, THE AI COMPLEX WILL UNDERGO A MAJOR REVISION DUE TO RISING OIL PRICES AND UNITED STATES POLITICAL FACTORS, AND BITCOIN WILL NOT BE SPARED."

SpaceX IPO trap

• "THE MARKET'S EXPECTATIONS ARE NOT ITS NORMAL TRADE, IT'S AN IPO, IT'S GOING TO HAVE TO GO UP 50%, AND IT'S GOING TO HAVE TO GO UP IN A WAY THAT TELLS ME THAT THE MARKET STILL BELIEVES IN AI, CHOOSES THE STAR COMPANY, AND IT'S GOING TO GO ON AND ON."
• " SpaceX, with a market value of about $1.8 trillion, will become the seventh largest company in the world. SpaceX transactions are valued at close to 100 times the market. It's fucking ridiculous. It's gonna be the seventh largest company in the world, but it hasn't proved anything."
• "It's a typical encrypted currency scam pattern: low circulation, high and completely diluted valuation, 4 to 5% circulation, and by September it's going to climb to nearly 25% -- insiders are going to sell you continuously from July to October."

EVIDENCE OF ANTI-AI STRATEGY

• "I have asked Perplexity AI to search all competing constituencies for any information on the data centre construction restrictions or local opposition bills. The result is that if Trump went backwards, it would be enough for him to flip enough seats to keep the House."
• "Trump has no ideology, he only cares about winning. He's in 2020 sending checks to every American -- that's the purest direct distribution of money. So don't think he won't turn to naked populism."

Fed, Walsh and interest rate risk

• " Oil prices are higher and do not fall in the near future, and the two-year national debt return is currently about 60 basis points higher than the effective federal fund rate. The market is telling the Fed that you need to raise interest."
• "The bubble's worst fear is that interest rates will rise and that the cost of money will always drive people out of the casino in some way."
• "I CAN'T SEE ANY SPACE FOR WALSH TO FALL. IF THE INTEREST RATE REDUCTION IS ONE OF THE PILLARS OF YOUR OPTIMISM ABOUT THE AI BUBBLE AND ITS CONTINUITY, THEN I THINK YOU NEED TO SERIOUSLY QUESTION THAT ASSUMPTION."

Encrypt catalysts and re-entry times

• "I DO NOT SEE MANY SIGNS OF PRINTING MONEY, AND EVEN IF IT DOES, IT GOES STRAIGHT TO AI BUILDING."
• "What would you buy if we returned to the perfect economic hotbed of high growth and low inflation? Do you buy Inverda or bitcoin? Of course you don't hesitate to choose Yin Weidar for Samsung, do you? Because they've increased 50 times in two years or something. You'll buy bitcoin? Of course not."
• "THAT IS THE MOMENT WHEN THE ENCRYPTED CURRENCY CAN BE WON -- AI HAS BEEN CREDIT BROKE, NOT THAT IT NO LONGER EXISTS, BUT THAT IT NO LONGER SOARS AS BEFORE, AND INVESTORS NEED TO TRADE SOMETHING ELSE. I HOPE THAT ONE OF THOSE THINGS IS ENCRYPTED MONEY, AND THEN LIQUIDITY GOES BACK TO ENCRYPTED MONEY."

Answer the question

• "At the end of the year bitcoin over $100,000 or below?"
• "TODAY, $1 MILLION IS INVESTED IN ANY ASSET -- BITCOIN, HYPE, SHORT-TERM NATIONAL DEBT, GOLD

Why did you clear everything

Host Kyle Chasse: Arthur, welcome back. You sold Zcash, hype, NEAR, and everybody's calling you out of a scam, pulling up shit. Why did you sell everything, exactly what happened。

Arthur Hayes:

I just published an article called " Reality Test " , about 5,000 words, which set out the argument that I will finish in the podcast in a few minutes. If you want to learn more about my reasoning, strongly suggest going to my Substack. In essence, however, the core is an anti-opportunity interaction between oil prices and the medium-term election rhetoric of Trump – he needs to help the Republicans defeat the Democratic Party and keep the Senate and Houses in November. The question is whether the matter at hand is not important — whether you like it or not, it is there, right here, right now。

So there is a need for an agreement between Trump and the Iranian Revolutionary Guard to end the conflict. On the other hand, there is a realistic constraint on both sides, namely, that oil prices determine how angry they are with each other in different parts of the world. Trump has to worry about domestic — voters do not like high oil prices or energy-driven inflation. The Iranian side is under pressure from China and other developing countries -- "What are you doing?" We need this oil, we need these commodities through the Strait of Hormuz. I know America attacked you, but we'll figure it out. So the higher the price of oil, the more eager you are to negotiate, then the lower the price, and suddenly no one wants to agree. So we've been swinging around in these chainsaws for about three months, or as long as the war goes on。

As this process progresses, we are actually consuming oil and other hydrocarbons from commercial and national reserves. Selecting a single energy analyst, they have different charts but agree — pre-war stocks are abundant, so it is believed that oil and gas supplies are oversupply, which leads to relatively low prices. But we are now consuming those surpluses at an increasingly rapid pace. We'll reach a certain level at some point — I don't know how many billion barrels, and each analyst has his own number and date. Once that date is crossed, the situation will suddenly become very, very bad. The only way to get markets back in balance is to push oil prices fast。

This is the worst case scenario — no agreement between Trump and the Iranian Revolutionary Guard. By October of this year, the Strait of Hormuz was still under a substantial blockade, with only 25 to 30 per cent of traffic passing, but far from enough. More likely, some kind of agreement may be reached in a month or two, and shipping in the straits may resume to some extent. But then everyone needs to rebuild their stocks, and you have to rebuild your national reserves, and of course you'll build up more than before. Because you've just experienced the taste of being completely at the mercy of Trump and a group of Iranian generals who have decided whether or not your country will receive the goods. So you're thinking, "I'm going to hoard more oil, gas, helium, all that's needed to run the modern economy." That's going to lead to more demand, which may not push prices to the top of a catastrophic scenario, but still means that oil prices, gas prices and other commodity prices will be higher in three or four months。

The link between oil, war and elections

Arthur Hayes:

Following this logic, this mid-term election by Trump and his old Republicans (November 2026), the House of Representatives is probably about to take over. Now you're going to Pollymarket to open the door, and the Democratic Party has won 82% of the House。

Why? Trump was apparently hanged on the cost of living. It was felt that inflation was bad and deteriorating, and in the eyes of ordinary people, the Republicans were now in power in the White House, and they had provoked the bloody conflict and war. That's why people think they'll lose, and they'll lose badly。

THE PROBLEM IS YOU CAN'T DO ANYTHING ABOUT INFLATION. – THE POLICY HAS A LONG LAG, AND THE SUPPLY CHAIN IS NOW ONLY BEGINNING TO ABSORB WHAT HAPPENED THREE OR FOUR MONTHS AGO. I DON'T THINK TRUMP CAN TURN THE TIDE ON INFLATION NARRATIVES. PEOPLE CAN SEE AND FEEL AT THE GAS STATION THAT NO JEDI MIND CONTROL IN TRUMP CAN CONVINCE YOU THAT INFLATION DOES NOT EXIST. IT'S THERE. YOU SEE IT EVERY OTHER DAY. SO WHAT ARE THE ISSUES THAT CAN STIR UP THE ENTIRE POLITICAL SPECTRUM OF AMERICA? THE ANSWER IS AI DATA CENTER -- AROUND ITS REGULATIONS, TAXES, ALL THAT. I THINK THE DEMOCRATS ARE FINDING AN EXCELLENT CAMPAIGN MESSAGE: NO MORE DATA CENTRES, TAXES ON THE AI GIANT, SUPERVISION OF AI. BECAUSE NOT ONLY WOULD THE POOR BE UNEMPLOYED, BUT THE RICH WOULD BE REPLACED BY AI, AT LEAST PEOPLE WERE SO AFRAID。

TRUMP TURNED AGAINST AI

Arthur Hayes:

IF YOU, AS AN OPPOSITION PARTY, CAN TAKE ADVANTAGE OF THIS FEAR, YOU HAVE TWO POWERFUL MESSAGES: FIRST, THE HYPERINFLATION CAUSED BY THE REPUBLICAN WAR, AND SECONDLY, THE "AI" CAMPAIGN, WHICH IS ESSENTIALLY ENDORSED BY REPUBLICAN POLITICIANS. SO MY THEORY IS, IF TRUMP WANTS TO TURN A RABBIT OUT OF HIS HAT, THE ONLY THING HE CAN TURN HIS POSITION AROUND IS AI. TAKE THE DEMOCRATS AND SAY, "WE'RE GOING TO REVIEW THE DATA CENTRES, WE'RE GOING TO SET UP AN AI NATIONAL DIVIDEND AND TAX THEM. "THAT'S THE TRUMP WORD, HE CAN SAY A LOT OF THINGS, AND IT'S ANOTHER THING TO DO AFTER NOVEMBER. I THINK IT'S THE ONLY WAY THEY HAVE A CHANCE TO WIN, TO SHAPE THEMSELVES INTO A POLITICAL PARTY THAT PROTECTS AMERICANS FROM AI, AND THEN AMERICANS FORGET THAT IT'S THE REPUBLICANS THAT FINANCE ALL OF THIS, BECAUSE PEOPLE FORGET. SO I THINK THIS IS THE MAIN RISK。

And Trump's willingness to attack AI depends solely on the price of oil, which is the result of his antithetical relationship with the Iranian Revolutionary Guard. The longer this war drags on without a solution, the more we accumulate the massive commodity pressure that will lead to price hikes in the future, the more likely Trump is to use AI to try to win the election, at least to help the Republicans keep the House. Obviously, the most devastating thing about AI narratives is taxation and regulation. We've seen in South Korea that a South Korean politician came forward to say that some kind of national AI tax should be imposed, and that day Cosby fell. So I think that if this kind of talk starts to get out of the hands of the ruling party, especially Trump, you'll see the AI bubble at the top, at least in the next few months, until the election period, which will bring the encryption market together. That is the central argument of the whole. I really don't want to think about this anymore, so I cleaned up the whole portfolio later last week。

New portfolio configuration

Moderator Kyle Chasse: What are most of your current assets, cash or national debt

Arthur Hayes:

National Debt and Energy Unit。

Moderator Kyle Chasse: Do you still think that if the AI bubble breaks, energy will survive

Arthur Hayes:

WE STILL NEED OIL. IT DOESN'T MATTER IF YOU LIKE IT OR NOT. PEOPLE NEED OIL, AND IT DRIVES THE WHOLE CIVILIZATION. AND I'M NOT SAYING THAT AI WILL NOT CONTINUE TO GROW, BUT THE PROBLEM IS THAT OUR WILLINGNESS TO PAY THE LONG-TERM MULTIPLIERS FOR THIS GROWTH WILL DECLINE, SO THE PRICES OF THESE ASSETS WILL FALL. THAT DOESN'T MEAN THAT THESE COMPANIES WON'T BE PRETTY, BUT WE THOUGHT THEY'D BE NICER AND LESS BEAUTIFUL, SO WE SOLD THEM, THAT'S LOGIC。

AI MATH OF CAPITAL EXPENDITURE BUBBLE

Arthur Hayes:

My deal is based on a sense of mind and intuition, not much on analysis. I feel like we're at some stage of the AI bubble, and I'm not sure which stage. I listened to the podcast of Marco Papovich this weekend. He's a BCA strategist, and there's a great YouTube channel called Geopolitic Cousins, which I strongly recommend. Many of his opinions were also written in the podcast, and he made an important point: When you invest in AI, you invest not in profit, but in capital expenditure for data centres. And I often forget this: You cast a second-class guide, an acceleration or slowing of the trend. If the trend is accelerating, you're willing to pay an infinite number of times the valuation for future revenues; if the trend is slowing, you don't want to, and it won't go as fast as you need。

He had recently sent a chart showing the second-tier guide to the acceleration of capital spending, which was making it harder to accelerate. We've reached $80 billion in 2026, and he predicts that the second tier of AI capital expenditure will slow down from 2027. You cannot value 100 times the sales of SpaceX or any AI company with both profit and capital expenditure slowing down. Even if the revenues of these companies are growing, the focus is not here — it is how fast they are growing, how fast they are changing, and how well you feel about the rate of change. We already know in mathematics that capital spending cannot increase as fast as it did in 2023 to 2026, based on the rule of big numbers, in the near future. So, when does the market turn this future into "I'm no longer willing to pay 50, 60, 70 times the earnings of these AI stock or supply chain companies"? When will the market realize that opposition parties around the world are taking advantage of this mood -- "Fuck data centre inflation, fuck AI for my job"? Why is it only Elon, Sam Altman, Zuckerberg and about 15 people who are turning into trillionaires and privatizing the knowledge of all human civilization into their own possession? This is not unique to the United States, and the world is asking the same question: If AI is trained in human interactive data, they legally and illegally use all these public and private data to make these things, and how can they enjoy exclusive profits? This is a legitimate issue for those who have sufficient assets to participate in these equity stories。

One day the market will feel a backlash. There will always be conflicts between capital and labour, whether you are willing or forced, and at some point there will be some kind of agreement. If you still hold those assets at the time of the agreement, they are usually crushed. These thoughts have been in my mind. Then I sat down and tried to figure out what was going on, and then I took a morning to clear up。

WHY DID BITCOIN LOSE, AI

Moderator Kyle Chasse: What do you think will happen to the market between now and the end of the year

Arthur Hayes:

To answer that question, I've been thinking about another question: Why didn't bitcoin rise to a higher position since November 2022? I have repeatedly said the same thing on your show and in many other places: it's all about mobility. If there was more liquidity in the future, bitcoin should have risen. But now it seems that this is clearly wrong. Because if we count from ChatGPT commercialization on November 30, 2022 until now, bitcoin does go up, but Inverda and all of those AI stocks do. Let's see when bitcoin comes to the top: last October, $125,000. So, all the liquidity created during this period, my model tells me that I've created trillions of dollars in liquidity, so why didn't bitcoin reach 500,000, or $1 million? Why did it lose, AI

I DON'T USUALLY LOOK WHERE THE MONEY GOES, AND I JUST SAY, "THERE'S SO MUCH MONEY THAT BITCOIN SHOULD GO UP." IT'S A LAZY WAY OF THINKING, AND IT WORKED, BUT IT DIDN'T WORK THIS TIME. SO I WENT BACK TO MY THINKING MODEL AND ASKED MYSELF, "WHAT'S MISSING?" THE ANSWER IS THAT WE ALL BELIEVE THAT AI IS PROBABLY ONE OF THE MOST TRANSFORMATIVE TECHNOLOGIES IN HISTORY, WITH MASSIVE CAPITAL SPENDING, TRILLIONS OF GRADES. BUT HOW MUCH DEBT DID AI CONSUME DURING THIS PERIOD? IS AI SUBSTANTIALLY CROWDING OUT ALL OTHER RISK ASSETS AND ABSORBING EXCESS LIQUIDITY FIRST

At a higher level, I don't usually use M2, because I think it's too rough and not detailed, but use it for an example. From ChatGPT to now, the U.S. M2 has increased at least $1.5 trillion. I went to ask how much debt was paid to AI and AI-related companies. The estimate is about US$ 1.5 trillion, of which US$ 1.3 trillion is focused on distribution between 2025 and 2026. In other words, although we can say that this round of AI fanaticism was set on fire at the end of 2022, the capital market's debt pump is in a very backward phase, and it's only starting in the near future。

MY THEORY IS THAT BITCOIN CAN BOUNCE FROM A LOW POINT BECAUSE THERE'S REALLY A LOT OF LIQUIDITY CREATED, AND AI DIDN'T CONSUME IT MUCH UNTIL 2025, AND BITCOIN HAS BLUE CLOUDY SPACE TO TAKE ADVANTAGE OF THE FLOW. FROM 2022 TO 2025, REVERSE PURCHASES FELL, ETC., AND VARIOUS FACTORS WERE BENEFICIAL TO IT. BUT IF YOU LOOK AT AI'S CAPITAL EXPENDITURE AND LOAN CHARTS, THE REAL START IS IN 2025, ESPECIALLY IN 2026. AND THAT'S WHEN WE SAW BITCOIN STRUGGLING, AND LAST OCTOBER IT WAS AT THE TOP, AND NOW IT'S DOWN 50, 60 PERCENT. SO IF ALL THE LIQUIDITY IS GOING TO AI, THERE'S NO SIGN OF STOPPING. IF AN AI FOAM FIXES OR BREAKS, INVESTORS WILL NOT SUDDENLY THROW A LOT OF MONEY INTO BITCOIN, THEY WILL SELL AI, THEY WILL SELL BITCOIN, THEY WILL SELL EVERYTHING. WHEN THE FOAM BREAKS, ALL ASSETS ARE RELEVANT 1. EVERYTHING FALLS TOGETHER UNTIL THE DUST SETTLES AND THEN CERTAIN SPECIFIC ASSETS START TO WIN。

Therefore, if I were to believe that in the next six months, the AI complex would undergo a major revision due to the rise in oil prices and United States political factors, Bitcoin would not be spared. It's supposed to be better after the revisions, but you have to go through that fall first. That is why I do not see a very favourable environment for contrasting and other encrypted currencies. And apparently I'm doing pretty well on NEAR, Hype, Worldcoin and Zcash, and I'm selling it for profit. I want to put the profits made in these transactions in a bag and sit around. These assets may continue to rise, but, at least in my thinking model, I feel uncomfortable about the risks to which the current time is held up, the unknown risks that I can foresee and how they may evolve, which is why I withdrew the chips。

SpaceX IPO trap

Moderator Kyle Chasse: There's one other thing I've been thinking about, the standard 500 is going up, but most stocks are actually falling, and the whole index is being dragged away by a few tech shares. More importantly, we're going to welcome new stock listings for OpenAI, Anthropic and SpaceX, which could have a new market value of over $4 trillion. Do you think these things drain everyone's mobility for a while? What do you think of these IPO directions

Arthur Hayes:

I think it's hard to behave because the market's expectations aren't what it normally does, and the market's expecting is that it's an IPO, and it's gonna have to go up 50 percent, and it's gonna have to go up in a way that tells me that the market still believes in AI, that it chose this star company, that it's gonna keep going. SpaceX, with a market value of about $1.8 trillion, will become the seventh largest company in the world. To get SpaceX up 50 percent, it's bigger than Amazon. If you've read its S-1 book, you'll find SpaceX's transaction valuation is close to 100 times the market. It's fucking ridiculous. It's gonna be the seventh largest company in the world, but it's never proved anything。

Yeah, it's a great idea -- space data centres, policy issues in ground data centres, and I agree that this logic makes sense. I'm looking at a substack called Semi Analysis, who do semiconductor and AI in-depth research. They wrote an article on the full cost comparison of space data centres and ground data centres, concluding that the current cost of operating data centres in space is four times that of the ground. Not only that, you don't have enough chips to realize Elon's vision, but the ground still has the capacity to build data centres. It may not be as easy to build on the ground as you would have hoped, but it's four times cheaper, so you'll choose to build on the ground until you can't. According to the most optimistic estimates, space data centres want real cost parity with the ground, at least some time in the next decade。

So the funny reality now is that the whole network of capital is willing to pay 100 times more for a company that's four times more expensive than its competitors and that the rocket will explode and will not make real money in the next decade。

And most of all, it's a classic encrypted currency scam model: low-flowing, highly diluted piece of junk. Four to five percent of the traffic will climb to nearly 25 percent in September, and the insiders will continue to sell to you from July to October, and it is the seventh largest company in the world at the time of the deal, but nothing has been proven in this data centre's argument. Except for the satellite Internet and so on, that's really pretty. Those are not why you bought SpaceX。

So I think it's hard to meet market expectations. I'm not saying it's gonna fall, but even if it goes up by 10 percent, the market reaction would be, "It's not good enough, I expect 50, 60, 70 percent of the increase." This leads investors to question: while SpaceX is increasingly able to sell shares to the market, do I really have to compete for Anthropic or OpenAI to be listed in September

Setting prices so high creates a situation where it is almost impossible to exceed expectations. If it was a $100 billion company, it could go up two or three times, and then people would say AI was still in place, SpaceX soared because they chose a lower market value to issue shares. But now it's maximized extraction -- 1.8 trillion. Be a better actor than Young Waida? Very, very hard. I'm sorry, Elon, you can't beat Jensen. I don't know who the current CEO of Amazon is anymore, but you can't beat these companies. These companies have real income, are operating and have proven their claims. And SpaceX is still basically written on napkins. Give it time to prove it, but will you really push up an 1.8 trillion dollar stock by 50%? It's really hard. That's why I think it's going to be the kind of event that seriously shakes people's faith in AI narratives, just because it's too big and almost impossible to rise。

Moderator Kyle Chasse: How do you think liquidity flows during IPOs? Will it be massive transfers? Or like Elon, who sells first

Arthur Hayes:

Is the first. People are excited to take their mobility away from other assets. If SpaceX's performance is disappointing, then I think that Anthropic and OpenAI will be under great pressure to lower their issuance pricing, and once the AI giants are forced to lower their valuations or fund-raising levels on the eve of their listing, this creates a very fatal precedent in the market, which is no less than official cutting itself, softly declaring that the AI bubble is really blowing all over the world, and we will take the initiative to lower our expectations for the future. All of a sudden, people hesitate: Why did they lower prices after SpaceX? Why is the distribution scaled down? All these changes may cool down the enthusiasm of investors. So it's probably people taking money away from the rest of the market, or it's just people just calming down on the AI cow story and slowly dropping out of the market, which triggers a chain drop。

EVIDENCE OF ANTI-AI STRATEGY

Moderator Kyle Chasse: I want to go back to the Trump-AI narrative, and maybe someone will argue that all the big als are the ones who helped him get elected, at least helping or making a difference. We know he's had many private dinners and discussions with them, they're his big funders and donors, and he's been publicly supportive and appreciative of AI。

I'VE NEVER COUNTED HOW MANY PEOPLE HAVE PUBLICLY OPPOSED AI, AND I KNOW MOST PEOPLE DON'T HAVE THAT WARM AND VAGUE AFFECTION FOR AI, SO IT COULD BE A PRETTY SMART TURN. BUT I'VE NEVER HEARD ANYTHING FROM ANYONE. IT'S A RATHER BOLD PREDICTION. HOW SURE ARE YOU THAT? ARE THERE ANY SIGNS THAT YOU BELIEVE HE MIGHT GO THIS WAY

Arthur Hayes:

I still used Perplexity AI, and I asked it: "Polymarket says the Republicans are losing. Is there a way to win? Let us begin with a bottom-up political logic: why does Trump have to keep the House of Representatives alive in the middle elections? This is not for any noble ideology, it is for his own political defence. If the House were taken away by the Democrats, he and his family would receive mountain parliamentary summonses throughout the next two years. The Democrats can fight and haunt him. He will have no chance to create any real legacy that he should have for "Trump's second term." I think that's why he wanted to win。

I BELIEVE TRUMP HAS NO IDEOLOGY. HE ONLY CARES ABOUT WINNING. DURING THE 2020 EPIDEMIC, HE PROVIDED THE UNITED STATES PUBLIC WITH THE LARGEST FINANCIAL TRANSFER SINCE THE NEW DEAL — A CHEQUE FOR EVERYONE. HE HAD NOT BEEN SCREENED AGAINST THE INCOME THRESHOLD, THERE HAD BEEN MASSIVE FRAUD AND THE RICH AND POOR HAD RECEIVED CHEQUES. SO HE WON'T TURN TO NAKED POPULISM AND GO STRAIGHT TO THE WILL OF THE PEOPLE — THE PEOPLE DON'T LIKE AI. AI PROVOKED NEGATIVE SENTIMENTS AMONG REPUBLICAN AND DEMOCRATIC VOTERS. SO I ASKED AI: IF THESE SEATS ARE PREDICTED TO BE RIGHT, LET'S GET RID OF THOSE SEATS THAT ARE LARGELY STABLE BECAUSE OF THE REDRAWING OF CONSTITUENCIES. BUT EVEN SO, THEY STILL NEED SOME MORE SEATS TO HOLD THE HOUSE。

SO I ASKED IF THERE WAS A BAN ON THE CONSTRUCTION OF DATA CENTRES OR LOCAL LEGISLATION THAT LIMITED THE IMPACT OF THE CONSTRUCTION OF DATA CENTRES IN ALL ELECTORAL DISTRICTS WHERE THERE WAS INTENSE COMPETITION AND ERROR. HELP ME SEARCH ALL THESE CONSTITUENCIES. THE RESULT WAS THAT IF TRUMP WENT AGAINST AI, HE WOULD BE ABLE TO FLIP ENOUGH SEATS TO ALLOW THE REPUBLICANS TO WIN THE HOUSE OF REPRESENTATIVES, AS THESE CONSTITUENCIES HAD PROVED AT THE BIPARTISAN LEVEL THAT THE LOCAL POPULATION DID NOT WANT THESE DATA CENTRES TO BE LOCATED IN THE PLACES WHERE THEY LIVED AND HAD TAKEN LOCAL ACTION。

And again, it's all rhetoric, and Trump actually doesn't have to do anything. He can call Jensen and say to the Big Al, "Listen, I'm gonna hit you hard in the next four months. By November, none of this would have happened." That's what he did. He attacked them, the stock price fell and some lost money. As you can see from his customs operations, all his hedge fund buddies lost billions of dollars in trying to substantially rewriting the US trade infrastructure. Finally, he stopped at a critical time, but at least he proved his willingness to try。

SO I DON'T THINK THERE'S ANY REASON WHY HIS POLITICAL STRATEGIST WOULDN'T DO IT IF HE SAW THAT THE ANTI-AI POSITION WOULD BRING ENOUGH VOTES, EVEN IF IT WAS A RHETORICAL MOVE. THE ONLY VICTIMS WERE THE STOCK MARKET, WHICH HAD LOST ONLY A GROUP OF RICH PEOPLE. YOU DON'T EVEN HAVE TO REALLY DO ANYTHING BECAUSE YOU'RE JUST TALKING AND NO BILL WILL PASS. AFTER NOVEMBER, EVERYTHING WENT BACK TO "WE HAVE TO WIN THE AI CONTEST OVER CHINA." SO I THINK THAT THIS IS A VALUABLE PATH FOR THE REPUBLICANS TO WIN THE ELECTIONS WHEN INFLATION NARRATIVES ARE FIXED. I DON'T CARE IF OIL PRICES DROP BY 50 PERCENT, GASOLINE PRICES MAY DROP A LITTLE, BUT TOO MUCH OF THE SUPPLY CHAIN IS ALREADY ON THE WAY, AND BY OCTOBER THE PRICE ON THE SUPERMARKET SHELF WAS HIGHER, AND TRUMP WAS ALMOST HELPLESS。

Fed, Walsh and interest rate risk

Moderator Kyle Chasse: Let's talk about Walsh. I know there's not much certainty now, because the first FOMC meeting since he took office is not due until next week. What do you think his policy orientation would be based on his earlier statements and the proximity of the midterm elections

Arthur Hayes:

I DON'T REMEMBER THE DETAILS OF HIS LAST SPEECH, BUT THERE'S THE ARGUMENT THAT YOU CAN SEE THE WAR-ERA COMMODITY INFLATION AND THEN BELIEVE THAT AI'S PRODUCTIVITY MIRACLE WILL LEAD TO INFLATION-FREE GROWTH, SO YOU CAN LOWER INTEREST RATES. I THINK THAT'S WHAT THE MARKET WANTS TO BELIEVE IN. THE UNFORTUNATE REALITY IS THAT OIL PRICES ARE HIGHER AND DO NOT FALL IN THE NEAR FUTURE, AND THE TWO-YEAR NATIONAL DEBT RETURN IS CURRENTLY ABOUT 60 BASIS POINTS HIGHER THAN THE EFFECTIVE FEDERAL FUND RATE. THE MARKET IS TELLING THE FED THAT YOU NEED INTEREST RATES. THAT'S THE SIGNAL THE MARKET IS SENDING TO THE FED, AND I DON'T KNOW IF THEY CAN DO IT。

And I also think that Trump might be able to reduce his attachment to the interest rate in private, because if he wanted to do something about the burden of living, the last thing he should do was to get the Fed to start the interest rate down at 3.5 to 4 percent of inflation. If he really competed for a part of the electorate on the issue of affordability, the reduction would have caused him to fail in the mid-term election. So I think it would be extremely difficult for Walsh to lower interest rates, given the silo layout of the market. I'm judging the baseline situation as he stands still, the question is only the wording — whether the eagles stay still or the pigeons? If the hawks remain silent, suggesting that inflationary pressures are building up and that the Fed may need to act in the future, the market will reciprocate the message: "They will increase interest at some point." And the bubbles are most afraid of rising interest rates, and the rising cost of capital will always in some way drive people out of the casino。

SO I THINK HE HAS A VERY LOW PROBABILITY OF FALLING INTEREST RATES, AND THE PROBABILITY IS THAT THEY WILL REMAIN STATIC, AND THEN IT DEPENDS ON THE WORDING. THE FED HAS FEW OPTIONS TO SUPPORT BUBBLES, AS OIL PRICES HAVE PUSHED THE TWO-YEAR NATIONAL DEBT RETURN TO EFFECTIVE FEDERAL FUND INTEREST RATES, AND OIL PRICES HAVE SOARED AND SPREAD WIDELY THAT RETURNS HAVE BEEN HIGH. I CAN'T SEE ANY SPACE FOR A DROP IN WALSH. IF THE INTEREST RATE REDUCTION IS ONE OF THE PILLARS OF YOUR OPTIMISM ABOUT THE AI BUBBLE AND ITS CONTINUITY, THEN I THINK YOU NEED TO SERIOUSLY QUESTION THAT ASSUMPTION。

Encrypt catalysts and re-entry times

Moderator Kyle Chasse: So, between now and the mid-term elections, do you think there will be any short-term breathing rebound for the market? I mean not what market manipulation is, but what is going on or what is going on that could bring some kind of rebound from now to the end of the year

Arthur Hayes:

People might believe that MicroStrategy would continue to pull in some way or another, that it might rekindle a lot of emotions, but I do not see many signs of printing money, and even if it did, it went directly to AI. So I don't see any big positive catalysts that can pull encrypted money out of this low, or at least let it win relative to AI. Because what would you buy if we returned to the perfect economic hotbed of high growth and low inflation? Do you buy Inverda or bitcoin? Of course you don't hesitate to choose Yin Weidar for Samsung, do you? Because they've increased 50 times in two years or something. You'll buy bitcoin? Of course not. That's the problem, AI was so good. If the environment is the same and these things continue to perform well, why do you choose the encrypted currency? You'll just keep betting on capital spending to grow at 100% per year, and then keep buying these companies. Do you think this is sustainable

And that happens to be market belief now. But if I'm an institutional investor, the client says, "Nasdac is up 50%, why are you only up 10%?" "-" 'Cause I'm doing a hedge, and I bought a swing or something. "The client will say, "Why should I give the money to this fund manager, who's up by 10 per cent, instead of the 50 per cent?" That's the logic that devours everyone -- everybody says, "I want to maximize the benefits, why didn't you get involved?" That's the problem。

Moderator Kyle Chasse: When will you consider re-entering? What will convince you to come back

Arthur Hayes:

If, by autumn, oil prices were moderate, not so much higher, and Trump didn't turn his back on the AI tycoons, then I might re-enter the market and see where it's worth. But all of this now has an extremely harsh front-line – and in the next few months, SpaceX, Anthropic, and OpenAI’s epic IPOs, whose opening must be successful and must even blow out the biggest and most shattered rise in human history to match the largest IPO distribution in human history. When the reality doesn't match expectations, we're in trouble。

Moderator Kyle Chasse: Is there any way to judge when the encryption market will be ready for the next round of cattle markets

Arthur Hayes:

WE NEED TO SEE MORE PRINT MONEY, AND WE NEED TO PRINT MONEY NOT ALL TO AI. WHEN DID THIS HAPPEN? I DON'T KNOW, BUT I DON'T THINK IT'S HAPPENING RIGHT NOW. AS YOU OFTEN SAY, THE ONLY WAY FOR THE GOVERNMENT TO GET ITSELF INTO TROUBLE IS TO PRINT MONEY, WHICH IS INEVITABLE. IS THERE ANY WAY TO JUDGE THE TIMELINE OR TRIGGER THE CATALYST FOR THIS? IF THE AI BUBBLE REALLY BREAKS DOWN, SOME FINANCIAL INSTITUTIONS FALL OR SOMETHING, YOU GET A RESCUE. WHEN? I DON'T KNOW. BUT THAT'S THE MOMENT WHEN ENCRYPTED MONEY CAN BE WON -- AI HAS BEEN CREDIT BROKE, NOT THAT IT'S GONE, BUT THAT IT'S NOT GOING UP LIKE BEFORE, SO INVESTORS NEED TO TRADE SOMETHING ELSE. I HOPE THAT ONE OF THOSE THINGS IS ENCRYPTED MONEY, AND THEN LIQUIDITY GOES BACK TO ENCRYPTED MONEY。

I AM ABSOLUTELY CONVINCED THAT THE ANSWER WILL ALWAYS BE MONEY, AND THAT THE QUESTION IS JUST A TIMELINE. BITCOIN WAS THE BEST ASSET IN HUMAN HISTORY FOR THE LAST 15 YEARS. BUT UNFORTUNATELY, A LOT OF PEOPLE DON'T COME IN AT 1 CENTS, THEY BUY IT AT OTHER PRICES. IF YOU'RE AN ETF UNTIL THE TIME COMES, ON AVERAGE YOU'RE LOSING. EVERYTHING DEPENDS ON THE PATH DEPEND AND WHEN YOU GET IN. JUST BECAUSE YOU CAME IN SIX MONTHS AGO DOESN'T MEAN BITCOIN SHOULD GO UP FOR YOU. I THINK THAT A LOT OF PEOPLE NEED TO LEARN A PAINFUL LESSON。

Answer the question

Moderator Kyle Chasse: Last few quick questions. The first question, is bitcoin at the end of the year over $100,000 or below

Arthur Hayes:

Below。

Moderator Kyle Chasse: When is the season coming

Arthur Hayes:

WE'VE JUST HAD A SEASON WITH FOUR ASSETS. PEOPLE MAKE A LOT OF MONEY ON HYPE AND SOME OTHER COINS, SO I THINK WE'RE JUST THROUGH AND MAYBE WE'LL COME BACK, BUT I DON'T KNOW。

Host Kyle Chasse: Do you think you'll buy HYPE back by the end of the year

Arthur Hayes:

Yes。

Moderator Kyle Chasse: What would you choose if you invested $1 million in assets today — bitcoin, hype, short-term national debt, gold

Arthur Hayes:

ExxonMobil。