Former BitMEX CEO Arthur Hayes argues that Bitcoin’s recent price slump, especially its decoupling from tech stocks like the Nasdaq, is acting as a leading indicator of upcoming stress in the U.S. credit and dollar system driven by rapid AI-related job losses. He predicts that this stress will eventually force a large Federal Reserve liquidity response, which could push Bitcoin to new record highs.
Market Divergence as a Warning
Bitcoin has fallen sharply from its October 2025 all-time high (~$126,000) while the Nasdaq remains relatively flat, diverging from historical correlations. Hayes interprets this as an early warning of dollar liquidity tightening and broader credit stress that equities have yet to price in.
He calls Bitcoin “the fiat liquidity fire alarm” meaning Bitcoin reacts faster to changes in fiat credit conditions than traditional markets do.
AI Job Displacement & Credit Stress
Hayes ties the signal to artificial intelligence displacing workers, especially in high-income “knowledge” jobs, leading to rising consumer credit defaults and stress in banks and credit markets.
In his view, this creates a feedback loop: wage losses → fewer credit payments → tighter credit conditions → stress on banks → dollar liquidity contraction.
Fed Intervention and Bitcoin Outlook
As stress rises, Hayes believes the Fed will eventually inject liquidity in a large, unanticipated response to prevent broader financial instability.
That anticipated liquidity creation, he argues, would devalue fiat and support scarce assets like Bitcoin, potentially pushing BTC to new all-time highs.