Arthur Hayes says Bitcoin’s bull market has already started, arguing that a new wave of dollar and yuan liquidity tied to AI spending, wartime policy and infrastructure rearmament could push BTC back to $126,000.
In his May 12 essay, “The Butterfly Touch,” the BitMEX co-founder and Maelstrom chief investment officer framed crypto’s next leg higher as a macro liquidity trade rather than a narrow digital-asset story. His central claim is that governments and banks in the US and China are being pushed toward looser credit conditions by three overlapping forces: the AI arms race, military escalation, and a global shift away from just-in-time supply chains.
“The bull market began in earnest when the US attacked Iran on February 28th,” Hayes wrote, tying Bitcoin’s recent outperformance to what he sees as the start of a new political regime for money creation.
Hayes Points To AI, War And Fiat Expansion
Hayes argued that AI infrastructure spending has become a national-security priority in both Washington and Beijing. In his view, that makes monetary restraint politically difficult, because the US and China both see machine intelligence as strategically decisive.
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He said the AI buildout is already moving beyond the cash flows of large technology companies and into the credit channel. That shift matters for crypto, Hayes argued, because banks and central banks will be pressured to support capital expenditure for data centers, electricity generation and AI infrastructure.
“But in the here and now, dollar and yuan liquidity will continue to rise. And Bitcoin and crypto will benefit,” Hayes wrote.
The essay leans heavily on the idea that AI investment is structurally inflationary and potentially self-reinforcing. Hayes invoked Jevons Paradox, arguing that cheaper intelligence will increase total compute consumption, and the “Red Queen Effect,” under which companies must keep spending because rival model improvements can quickly depreciate previous investment.
In Hayes’ reading, the cycle ends only when markets reject a major AI financing event or when political rhetoric in the 2028 US presidential race turns sharply against AI-driven inflation. Until then, he expects credit to keep expanding.
Bitcoin Target: $126,000
Hayes said Bitcoin bottomed earlier this year at $60,000 and argued that a return to $126,000 is now “a foregone conclusion.” He also identified $90,000 as a key level where he expects the rally to intensify, claiming that call over-writers could be forced to cover once the strike is breached.
“I have no idea how high Bitcoin can go,” he wrote, adding that Maelstrom would take its portfolio to “maximum risk” unless conditions change materially.
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His thesis is not limited to AI. Hayes also argued that the US-Iran conflict and disruptions to commodity flows could push governments outside the US to rethink their dependence on dollar financial assets. According to the essay, countries that previously stored surpluses in Treasuries or US equities may instead redirect capital toward defense, energy, pipelines, food reserves and other physical infrastructure.
That shift, he argued, would leave US policymakers with an incentive to keep financial conditions easier than they otherwise would be. Hayes pointed to possible dollar swap lines and looser bank capital rules as tools that could offset foreign selling of dollar assets without forcing an abrupt market repricing.
Hayes closed the essay with a more explicit risk-on message for crypto markets. He said it is “time to shitcoin,” naming Hyperliquid’s HYPE and Zcash’s ZEC as already-large positions, while identifying NEAR as his next preferred trade.
The NEAR thesis, he said, will be expanded in his next essay and will focus on the privacy narrative combined with Near intents. Hayes argued that this could create “a positive cash flow situation for the protocol” and potentially reverse the token’s weak long-term price performance.
At press time, Bitcoin traded at $80,680.
Featured image created with DALL.E. chart from TradingView.com
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