Possible AI Crash Bullish for Bitcoin, Hayes Says

#PotentialBoom The former BitMEX CEO believes that the AI investment mania will be a major positive catalyst for Bitcoin if it ends up crashing down. In an interview with CNBC at the Gamma Prime Investing Conference in Singapore, Hayes said that the excessive investments pouring into AI data centers are ripe for an oversupply.

##The AI Investment Mania

The current investment mania in AI is a multitrillion-dollar case of capital misallocation, said Hayes. At the end of the day, all this means is that we will have cheap and accessible massive compute power. This might be a painful journey for financial markets in the process.

##The Potential for a Credit Crisis

If the AI infrastructure boom leads to a major credit crisis, governments and central banks will eventually intervene, according to Hayes. They will inject additional liquidity into the financial system.

##Bitcoin's Potential Winners

In his opinion, Bitcoin and other cryptos are the likely winners of all this excess cash. The immediate catalyst for a Bitcoin boost is not necessarily an AI crash. Initially, a major deleveraging move could be negative for risk assets.

##A Potential Scenario

The monetary response could be bullish for stocks around 2027-2028, when the companies that promised all this massive compute power need to actually generate enough money to justify the costs. Alternatively, over the next year, the demand for AI becomes strong enough to justify this large infrastructure investment.

##Conclusion

Hayes admits that this could be a potential scenario. He has compared the AI infrastructure boom to the credit excesses before the financial crisis of 2008. However, he does not view this current cycle as another dot-com tech bubble. Instead, he focuses on the debt financing for the data centers and expensive compute hardware. Currently, Hayes himself is not shorting the AI boom. Still, he is pretty confident that there is a lot of overbuilding.