Hayes: AI credit shock and liquidity could lift Bitcoin to $1M

Arthur Hayes outlined a scenario in a podcast and an essay where a collapse of AI-related financing, followed by large emergency liquidity injections from authorities, would push investors into crypto and lift Bitcoin to $1 million per coin.

Hayes noted roughly $1.5 trillion in AI-related debt was issued between November 2022 and mid-2026, a figure he compared with a roughly $1.5 trillion rise in U.S. M2 money supply over the same period. He wrote that newly created dollars were largely absorbed by data centers, GPU clusters and other AI infrastructure before they could support risk assets.

The Bank for International Settlements documented shifts in AI financing. The BIS found private credit to AI-related companies rose from near zero to more than $200 billion and that the share of private credit for those firms climbed from below 1% to almost 8%.

The BIS reported that some hyperscalers used special-purpose vehicles and operating leases to move infrastructure debt off their balance sheets. The BIS noted five-to-seven-year maturities and warned these arrangements could create new links between tech firms and non-bank investors if returns fall short.

Market participants described liquidity concentrating in AI-related names. Luke Gromen characterized the market as suffering concentrated gains and declining breadth and warned, “AI is sucking all the oxygen out of the room, all the liquidity out of the room, and I think that’s happening to Bitcoin as well.” Gromen also noted he sold most of his Bitcoin position near the market peak and has only partially re-entered.

Torsten Slok, chief economist at Apollo, wrote that the top 10 companies in the S&P 500 are more overvalued than the top 10 were during the 1990s tech bubble and now account for about 40% of the index.

Lyn Alden projected a smaller policy response. Her estimate for Federal Reserve balance sheet expansion in 2026 ran roughly $220 billion to $375 billion, and she set a threshold near $2 trillion for a crisis-scale expansion.

Hayes acknowledged a sequence problem: in a broad risk-off event correlations tighten and investors sell across asset classes. Bitcoin fell about 50% from its October 2025 peak near $126,000 during such a period even as the money supply expanded.

A 2026 advisor survey from Bitwise found 32% of 299 financial advisors had client allocations to crypto in 2025, the survey’s highest rate in eight years. Hayes noted that a Bitcoin price of $1 million would imply a fully diluted network valuation near $21 trillion and would require substantial capital reallocation into crypto.

Hayes tied his price path to two conditions: a large AI credit shock that prompts emergency liquidity injections and a subsequent flow of that liquidity into assets viewed as detached from the failed trade rather than into Treasuries, gold or surviving tech winners.