Arthur Hayes: Why am I selling all the money at this time
Author Arthur Hayes
♪ Compiled, made, Wu said ♪
Original link:
https://cryptohayes.substack.com/p/reality-test?r=73z4br&utm mediam=ios&
TL; DR:
ENERGY PRICES HAVE BECOME THE CORE VARIABLE FOR BREAKING THE AI BUBBLE: SOARING OIL PRICES AS A RESULT OF THE US-IRAQ CONFLICT WILL DIRECTLY INCREASE THE CALCULATION COSTS OF THE AI INDUSTRY, CRUSHING FIRM PROFITABILITY. IN THE AUTHOR ' S VIEW, THIS IS THE UNDERLYING VARIABLE THAT HAS THE MOST NEGATIVE IMPACT ON THE INVESTMENT SYSTEM AS A WHOLE。
AI ' S HIGH LEVEL OF DEBT-DRYING LIQUIDITY HAS PLACED BITCOIN UNDER PRESSURE: THE HIGH LEVEL OF CAPITAL-INTENSIVE AREAS IN AI, WHOSE HUGE DEBT TO BUILD DATA CENTRES AND PURCHASE CHIPS HAS ERODED THE NEW FRENCH CURRENCY LIQUIDITY, HAS HAMPERED THE RECENT INCREASE IN BITCOIN。
The three “darts” will collectively hurt many parts of the AI stock market: in addition to high energy costs, the market will not be able to absorb the natural stock supply from the three super AI IPOs (SpaceX, Anthropic and OpenAI); and, in the context of general elections and inflationary pressures, politicians have indicated that they may turn to pressure on the AI technology giant to win votes。
The tightening of liquidity is expected to slow down all at-risk assets: in the face of high inflation, the Fed has little hope of reducing interest rates and markets are threatened by hawks. This toxic macro combination will inevitably lead to a serious drag on the encryption market in the short term。
STRATEGIC CLEAR-UP AI AND YAMAMOTO, HEAVY ENERGY AND DOUBLE CORE: UNDER THE PRIORITY STRATEGY OF CAPITAL PRESERVATION, ALL AI SHARES AND NON-CORE BANKNOTES SHOULD BE SOLD OPERATIONALLY, TURNED INTO MULTI-UNITED STATES ENERGY PRODUCERS, AND STOOD FIRM WITH BITCOIN AND ETHERA, WAITING FOR THE CRISIS TO FORCE THE FEDERAL RESERVE TO RE-ESTABLISH ITS LOOSE BOTTOM REBOUND。
AM I DREAMING? CAN I BUY AI WITH MY EYES CLOSED? OIL PRICES HAVE NO IMPACT ON THE ECONOMY? THE FED WILL NOT HAVE TO CUT INTEREST RATES WITHOUT HIGH INFLATION? TO VERIFY THAT I'M NOT HAVING A DAYDREAM, I HAVE TO DO A REALITY TEST. IF THE TESTS FAIL, MY PORTFOLIO WILL FACE A BIG SHUFFLE. MY CORE JUDGEMENT IS THAT THE PRICE OF ENERGY (ESPECIALLY HYDROCARBONS SUCH AS OIL) IS THE UNDERLYING VARIABLE THAT HAS THE MOST NEGATIVE IMPACT ON THE INVESTMENT SYSTEM AS A WHOLE. THIS MACRO-MAINLINE WILL EVENTUALLY PIERCE THE AI STOCK MARKET BUBBLE AND IN THE SHORT TERM SLOW DOWN THE WHOLE ENCRYPTED MARKET. BITCOIN CAN ONLY REGENERATE ONCE THE DUST HAS SETTLED. LET'S GET STARTED。
A deal or a no deal -- that's a question
Politicians always react only to interests and votes. Trump launched an inexplicable conflict against Iran during the election year, and the biggest question now is how he should end up. This war has hampered the Strait of Hormuz, which has led to severe food and energy inflation. While his frenzy of basics continues to feel that long-distance warfare is cool, neutral voters are rapidly losing themselves in the face of soaring costs of living. As a result, “price affordability” has become the deadliest weakness of the Trump campaign for re-election。
Trump’s willingness to compromise against Iran was completely kidnapped by oil prices in order to deceive neutral voters: it was only when oil prices soared that he was willing to sit down, and once oil prices fell back, he would lose face, because the political cost of compromise was too high. On the other side, IRGC[1] faces the same game matrix: high oil prices can induce pressure from major trading partners, and the downward pressure on oil prices recedes. As a result, at the current level of oil prices, both sides are struggling with no incentive to compromise。
But this state of affairs cannot last forever, and once pre-war excess capacity is depleted, spot prices will surge in the third quarter. Politicians are always alive, and Trump and Iran will be forced to reach an agreement only when the situation is truly overwhelming. The central question that follows for our ideological experiments is: how will the rising oil prices reverse Trump's campaign tactics and rhetoric over the next few months
november final: red team vs. blue team
If oil prices are rising slowly, but not enough to force Trump and IRGC to reach an agreement, how else can Trump succeed
These Polymarket successes suggest that, in the current situation, the Republicans will be extremely desperate to retain control of the Senate. But they will suffer a terrible defeat in the House of Representatives。
While it appears that the Republican party will lose control of the House of Representatives, I would like to challenge this view. I think Trump still has a path to victory that needs to be achieved by changing his discourse on data centres and AI regulations/taxes。
In order to pave the way, the current distribution of seats in the House of Representatives between the two parties is as follows (the passage of legislation requires 218 votes):
On the basis of the current success rate, the political party composition anticipated after the elections is as follows:
This looks very bad for the Reds. However, the Empire counter-attacked through the redrawing of constituencies. When the rules of the game are doomed, you must change them. That's politics, folks。
Assuming Polymarket's predictions are correct, the Republicans need to fill the gap of 19 seats. This gap can be bridged by redrawing constituencies。
The following table shows the possible impact of the redrawing of the constituency:
Now, the Republicans have to close the gap to 11. Next, let's see which constituencies remain unsettled and, according to the current poll, may have a preference for the Red Team within the range of statistical errors。
There are 35 campaigns that may favour either side. I have already spoken about affordability, and Trump has very little to do about changing the narrative of the disastrous impact of inflation on neutral voters. Another highly sensitive issue for both constituencies is the construction of data centres and the impact of AI on employment. Unless you're a big rich class, everyone's worried about the inflation caused by data centres and AI taking away their jobs. This fear manifests itself in the suspension of the construction of data centres in many places and in the growing discussion about taxing AI to finance the welfare expenses of the non-AI-related company, the CEO, and its highly paid employees。
For the calculation of the electoral chips, please consider the local initiatives of several disputed constituencies (the table produced by Perplexity below):
Trump can get the last 11 seats needed by selling AI tech. At this stage, he needs only to make statements without taking specific legislation: promises to slow down the construction of the data centre, imposition of an excess profit tax on AI to provide relief, and then complete or partial non-performance after November – as he did with the Epstein archives。
With regard to his concerns about whether he would adopt extreme leftist measures and whether he would adopt extreme leftist measures such as AOC [2], remember that he had implemented the largest financial transfers since the New Deal. Now you're telling me that in order to preserve his political future, he won't point his head at Elon and Wong In-hoon over the next few months, claiming that he wants to level the inequalities between AI and humanity
If Trump really changes its position on AI, the market may not have enough intellectual flexibility to see it as merely a stopgap measure for elections. Investors will believe that, almost immediately, they will trigger a major upheaval and break the AI bubble. If it's hard to imagine how scared the market is in the face of Trump turning the gun, it's clear from Elon and Trump's saliva on social media。
Elon left his DOGE department and started mocking Trump. [3] Trump responded by threatening to cancel government contracts awarded to companies under Elon ' s commercial empire. $TSLA dropped 18% in the disc. Politics can and can be denied。
Obviously, it was a psychological war. Elon made up with the godfather and regained his preference。
Don't worry, Elon. Godfather still loves you。
The market was serious about the lack of trust and triggered panic sales. But this is just a little bit more than a signal that the Red Republicans who released him would support the imposition of huge taxes on the AI model and smarts. The next day, when a Korean politician made a similar proposal, the Korean composite stock price index (Kospi) almost collapsed。
The Korean Government quickly retracted these statements and the market then returned to a “sliding-up” state。
THE GRAND AI NARRATIVE ASSUMES THAT BUSINESS RETURNS WILL ALWAYS GROW EXPONENTIALLY AND WILL NOT FACE ANY SOCIAL RESISTANCE。It's just fantasy. Trump can break this fantasy, but it depends on oil prices。
As oil prices soared as a result of military operations against Iran, Trump’s campaign strategy was less open to choice. He was extremely concerned about the control of the Chamber of Deputies because once the Democratic Party had the power to summon, it would put him and his family in danger and might even use the testimonies collected to force the Ministry of Justice to retaliate against him in the future。
The inability of the United States and Iraq to reach a rapid agreement has provoked high oil prices to anger voters. At that point, the only focus that Trump can handle is data center construction and AI regulation/tax. So, targeting AI tech is the only way he can win. It's a small price to him to save the Democrats' endless summons to let the market drop 50 percent before the election. He is well aware that after the election, he can withdraw these strangulations and expect the stock market to rebound, but for your portfolio, seeing assets crash will permanently change expectations for AI equities. You will no longer be able to ignore the impact of taxation and regulation, and you will no longer be able to invest without concern as before。
California Dream
Before I explain the impact on global financial markets of AI's super-IPO (SpaceX, Anthropic and OpenAI), I must state my point:Why has Bitcoin not been able to rise significantly since the acceleration of dollar liquidity at the end of the third quarter of last year。
On November 30, 2022, the commercial launch of ChatGPT opened a great AI bubble. At about the same time, the white boy, Sam Bankman-Fried, from a “right” background, who was eating fake vegetarian food, openly misappropriated his client's funds. Bitcoin hit the bottom near ~15,000 dollars, then surged seven times to $125,000 in October 2025. However, during the same period of time, Nvidia grew 11 times, and other small shares, indispensable for transforming electricity into intelligence, have also achieved an extremely crazy increase. AI shares throw encrypted currency far behind. And from the end of 2024 to the present, this super-group performance of AI was even more accelerator。
Even when Bitcoin (the white line) was at a record high, Nvidia (the gold line) had a higher rate of return。
Bitcoin's performance is even worse after touching the new heights of history, and has fallen by 50 per cent since then. And even as the largest global market value company, Nvidia has achieved a remarkable 10 percent increase since the end of 2025。
According to my theory of French currency mobility, bitcoin should have risen even higher, but that is not the case. What's wrong with me
I had previously focused on the total amount of French money created without looking into the exact flow of funds, wrongly assuming that liquidity would eventually inject bitcoin and drive it up. I was wrong this time, so I had to go back to the essence。
MY INSTINCT IS: AI DRAINED ALL AVAILABLE FRENCH CURRENCY LIQUIDITY, ESPECIALLY THE DOLLAR. AI IS A HIGHLY CAPITAL-INTENSIVE AREA AND, IN ORDER TO CONVERT ELECTRICITY INTO INTELLIGENCE, IT WILL REQUIRE CONSIDERABLE ENERGY CONSUMPTION AND INVESTMENT IN DATA CENTRES AND OPERATING CHIPS。
As shown in the figure above, the data centre's capital expenditure (CAPEX) has risen dramatically since 2024 and increased dramatically in 2025. As a result, the need for funding has also increased. In terms of the impact of AI capital expenditure on the liquidity of the dollar, we are concerned only with the amount of its borrowing. Based on publicly disclosed information, Perplexity produces the following projections:
SINCE NOVEMBER 2022, M2 HAS INCREASED BY $1.5 TRILLION, WHILE VARIOUS TYPES OF DEBT ISSUED DURING THE SAME PERIOD COINCIDED WITH $1.5 TRILLION. THE CONCLUSION IS CLEAR: AI HAS DRAINED ALL THE NEW DOLLARS, AND BITCOIN HAS NO CHANCE. BITCOIN WAS ABLE TO REBOUND FROM THE LOW POINT ONLY BECAUSE THE AI DEBT VIGIL DID NOT ERUPT UNTIL 2025 (1.3 TRILLION OF THE 1.5 TRILLION DEBT OCCURRED IN 2025 TO DATE). AS A RESULT, BITCOIN PEAKED WHEN CAPEX PEAKED IN OCTOBER 2025。
This is essential. If the AI stock collapses, there will be no surplus going to bitcoin. With the sharp fall in equity prices of large cloud service providers, bank credit based on illusory cash flows will face real credit collapse, thus tightening overall liquidity. In the current political environment, there will never be immediate relief. While the government will eventually help the banking sector, in the run-up to the election, Trump will have to speak harshly about AI and his financial pushers in order to make the public believe that it will distribute its wealth fairly. Therefore, the rescue operation was only politically viable after the November elections。
GIVEN THIS DEEP BINDING RELATIONSHIP BETWEEN BITCOIN AND AI STOCK PRICES, WE HAVE TO MAKE OUR OWN JUDGMENT AS TO WHETHER OR NOT AI STOCKS ARE IN BUBBLES, WHEN BUBBLES BREAK AND WHY。
AI LEAD BALLOON
Three darts will pierce AI foam: higher energy costs, market incompetence of three super-IPOs (SpaceX, Anthropic and OpenAI), and Trump's anti-AI statements。
The essence of AI is to transform electricity into intelligence. If Trump and IRGC's geographies cause energy prices to soar, such as natural gas, Token's production costs will rise, thus crushing the profits of companies like Google, Anthropic and OpenAI. When firms are forced to raise prices to their customers, Token ' s use growth will slow, and AI ' s profits will decline substantially。
If Token ' s usage and returns both go down, the market will inevitably begin to question the viability of large data centre capital expenditure (CAPEX) schemes. Once this suspicion begins to spread, the game is over: forward earnings will shrink sharply, with the cruel bear market tearing you to pieces without mercy。
Source: Goldman Sachs
The funds raised by these three super-IPOs (SpaceX, Anthropic and OpenAI) and other technology units to unlock will exceed the sum of the entire Internet bubble era. Can markets absorb such a huge supply? Once faith is shaken and these new shares fail to surge as scheduled, investors will view them as a signal to the top of the market and start selling them。
We take the example of SpaceX, which has more details. Elon has a deep understanding of the “first seller makes the most money” and is the first to be listed to extract the largest capital from the light beryllium. For an encrypted circle player, this IPO is a familiar game: It is essentially a “spam coin” with low circulation and high market value (FDV). [4]
According to the S-1 document, investors pay them up to 100 times the market rate, compared to 4-5 per cent for the initial roller. It's almost destined to be on the market, and it's skyrocketing to the world's seventh giant with a market value of 1.8 trillion dollars. However, unlike Nvidia, which relies on substantial profits to support valuation, SpaceX has no corresponding profitability at all, but is simply a speculative investment in high-cost space data centres. If excessive initial valuations render second-tier market players unprofitable, the price is bound to be “sliding down” when insiders sell locks。
This raises the problem of unlocking the flow drive. By September, with SpaceX, Anthropic and OpenAI selling their shares centrally with a very high value of trillions of dollars, the market would be unable to absorb this supply at all, and would certainly cause great disappointment. At the same time, if high oil prices continue to irritate voters, Trump will have no choice but to rally the vote by pressing AI。
ONCE THE THREE DARTS ARE HIT AT THE SAME TIME WITH HIGH ENERGY COSTS, THE IPO SUPPLY AND POLITICAL PRESSURE, THE AI BUBBLE WILL BE COMPLETELY PUNCTURED AND THE BANKING SYSTEM THAT PROVIDES CREDIT WILL BE SEVERELY DAMAGED. IN THIS GLOBAL COLLAPSE, BITCOIN WILL NOT BE SPARED IN THE SHORT TERM AND WILL WAIT PATIENTLY FOR THE BOTTOM-UP REBOUND OF SUBSEQUENT LIQUIDITY RELEASES。
So my core task now is to protect the encrypted assets in hand. Before discussing portfolio allocation specifically, we must see whether the Fed will release or tighten。
Warsh's geometry
Should the nickname of the new Fed Chairman Kevin Walsh mean strength and courage, or weakness and obedience? It depends entirely on how he will deal with the contradictions facing his sacred institution, the Federal Reserve。
2 ANNUAL SOVEREIGN DEBT YIELD MINUS EFFECTIVE FEDERAL FUND INTEREST RATE (SHADING, WHITE), WTI CRUDE OIL FUTURES CONTRACT FOR RECENT MONTHS (BLUE)
Warsh is facing a dilemma. Trump expected him to reduce interest rates, but the rising inflation and spread data clearly showed that the market was demanding an increase. The most likely outcome was to maintain interest rates, but the market would then focus on his statements at the press conference and the changes to the RMP[5] plan. Once he releases the hawk signal, its destructive power will be equivalent to an increase in interest rates – high interest rate expectations, high oil prices, and the indigestion AI super IPO – a bottle of poison that will seriously damage all risk assets。
The worst case scenario for risky assets is that Trump forced the Fed to immediately increase interest rates for the vote, but it will only repeat the tragedy of the 1970s, which lagged behind the inflation curve. Now that the interest rate is completely out of reach, the market will certainly interpret the Fed’s move to tighten liquidity in the future, which will be the last straw to completely drown AI’s many heads。
Based on this logic, my prediction of an increase in oil prices has evolved into a global decline in all risk assets. And I'm going to discuss the specific direction of the Maelstrom portfolio。
Portfolio holding
If every fragment of our existence is a derivative of energy, then if I think that energy will become more expensive in the future, I must buy it. In the current state of affairs, Trump and IRGC still believe that they can both survive each other. The number of crude oil barrels and natural gas cubic feet lost as a result of the war continues to climb daily. This is even in the case of limited traffic through straits. Although the market is still optimistic today, if this pass-through continues, the dramatic rise in energy prices will be mathematically inevitable。
Whether the war continues to deplete stocks or the end of the war triggers large-scale replenishments for sovereign States, oil and gas prices will rise significantly over the next three to six months. So, my current strategy is to be a multi-core, large commodity, re-engineered by energy producers listed in the United States。
ON THE CONTRARY, ONCE OIL PRICES SOAR TO $150, THE AI SYSTEM SIMPLY CANNOT SUPPORT IT. IF ALL THE MONEY GOES TO WASTE IN THE COLLAPSE OF THE AI STOCK, INVESTORS WILL HAVE NO MORE POWER TO BUY ENCRYPTED MONEY. SO I THREW ALL THE AI SHARES AND THE NON-CORE WAREHOUSED BANKNOTES INTO THE TRASH CANS (INCLUDING HYPE, $NEAR, $WLD, AND $ZEC, WHICH WAS CLEARED BECAUSE OF THE LEAK). CAPITAL PRESERVATION IS NOW FAR MORE IMPORTANT THAN VALUE ADDITION。
I've only kept bitcoin and the Ether. I always believed that the break-up of the AI bubble would trigger a financial crisis that would force the Fed to open the "Peer-Standing" and that bitcoin would fall and rise. I'll hold the core position over the storm, and I'll make speculative space for derivatives. And if I'm wrong about all my predictions, I'm just going to go to bed before vacation, and I'll buy it back in September at a higher price. Without the short-term return pressure, Maelstrom is completely grounded in the long-term compound game。
[1] IRGC — IRAN ISLAMIC REVOLUTIONARY GUARD CORPS
[2] AOC — Alexandria Ocasio-Cortez
[3] DOGE - Department of Government Efficiency
[4] FDV — Full market value / Full Diluted Valuation
[5] RPP - Reserve Management Plan (Reserves Management Programme), also known as Invisible QE
