Amid growing excitement around artificial intelligence, BitMEX co-founder Arthur Hayes believes the sector is heading toward a major correction that could ultimately pave the way for Bitcoin’s next bull market.
In a recent essay, Situationship, Hayes argued that investors are misjudging the AI infrastructure boom by treating it as a high-growth technology opportunity rather than a capital-intensive real estate business.
According to him, this misunderstanding has fueled excessive investment in data centers and related infrastructure, creating conditions similar to previous credit-driven bubbles.
The boss contends that the rapid expansion of AI infrastructure is being supported by banks, private credit firms, hedge funds, and governments willing to finance massive construction projects. While artificial intelligence is expected to transform industries, he believes the infrastructure supporting it is vulnerable to oversupply.
Unlike the dot-com crash, which was largely driven by inflated expectations for corporate earnings, Hayes expects any AI downturn to resemble the 2008 financial crisis. In his view, the biggest risk lies in excessive lending and overinvestment, with too much capital flowing into data centers, power facilities, and other AI-related projects.
 
According to the executive, financial institutions are treating these investments as though they carry the stability and growth potential of established technology companies, when in reality they face risks more commonly associated with highly leveraged real estate projects. If financing conditions tighten or demand falls short of expectations, he believes the sector could experience a sharp correction.
However, Hayes believes such a downturn could create favorable conditions for Bitcoin.
He argued that a severe slowdown in AI-related investments would likely prompt central banks to inject more liquidity or introduce monetary stimulus to stabilize financial markets. Historically, periods of easier monetary policy have supported risk assets, including cryptocurrencies.
As liquidity returns to the financial system, Hayes expects Bitcoin to benefit alongside the broader digital asset market, potentially triggering what he described as a “rip-roaring” bull market.
Meanwhile, Bitcoin has continued to attract institutional attention despite recent market volatility. Spot Bitcoin ETFs have maintained steady investor interest in recent months, while long-term holders continue to control a significant portion of the circulating supply, suggesting confidence in the asset’s long-term outlook.
Although Hayes remains optimistic about Bitcoin’s prospects, his forecast ultimately depends on broader macroeconomic developments. The timing and severity of any AI correction remain uncertain, and whether central banks respond with aggressive monetary easing will likely determine how markets react.
That said, Hayes sees the AI boom and Bitcoin’s future as closely connected. While he expects the AI investment cycle to end with a painful correction, he believes the policy response that follows could provide the liquidity needed to fuel the cryptocurrency market’s next major rally.
At the time of writing, BTC was trading at $64,354, reflecting a 0.85% gain over the past 24 hours.
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