Simply put
- Arthur Hayes from Maelstrom Funds suggests that Bitcoin’s recent decline is diverging from the Nasdaq’s relatively stable performance, which he sees as a warning sign.
- He estimates that a 20% job loss among knowledge workers due to AI could result in $330 billion in consumer credit losses.
- While experts generally agree with this outlook, there’s some debate on how quickly such disruptions will unfold, with many believing it will take quarters, not weeks.
According to Arthur Hayes, co-founder of BitMEX, Bitcoin’s behavior highlights concerns that traditional markets may be ignoring.
Major cryptocurrencies have witnessed a downward trend since their peak of $126,080 in October 2025, while the Nasdaq 100 index has remained mostly unchanged. Hayes argues that this gap is driven by job losses linked to advancements in artificial intelligence, signaling an upcoming credit crunch.
On his Substack, he remarked, “This is how the banking crisis brings the Pax Americana economy to a complete standstill.” The piece, titled “This Is Fine,” comments on the current state of the US-led financial system.
Not everyone shares the dire outlook. Ryan McMillin, chief investment officer at Merkle Tree Capital, noted, “The divergence is worth noting, but it’s not a hard warning; it’s just one data point.”
McMillin believes that while Bitcoin’s separation from the Nasdaq is significant, issues like dollar illiquidity are a valid, partial explanation. He pointed to the Fed’s choice to maintain higher interest rates and run down its reverse repurchase facility.
There are also Bitcoin-specific issues—like four-year cycles, profit-taking after last October’s record, regulatory uncertainties, and ETF flow patterns—that independently influence the market.
Colin Gortra, CEO of Morph, stated, “The relationship between Bitcoin and stocks has never been static. Bitcoin sometimes trades like a risk asset and at other times moves on its own.” Therefore, he believes short-term divergences are not uncommon.
Hayes emphasized that Bitcoin is particularly sensitive to changes in fiat credit conditions, reacting first to any liquidity issues. This is in contrast to the Nasdaq, which hasn’t fully acknowledged what he calls an impending wave of job losses in white-collar sectors due to AI.
He questioned the need for numerous SaaS productivity subscriptions if AI tools can perform tasks much faster than humans, using Anthropic’s Claude Cowork as an example.
With the iShares Software ETF underperforming the overall Nasdaq, Hayes anticipates the next steps will involve targeting workers directly and, by extension, the banks lending to them.
He calculated that if 20% of the 72.1 million knowledge workers, who carry about $3.76 trillion in consumer debt, were to lose their jobs to AI, US banks could face $330 billion in consumer credit losses alongside $227 billion in mortgage losses.
McMillin pushed back on the timeline, suggesting that while the scenario makes sense, it overstated how quickly disruption would happen. He explained, “The labor market isn’t shifting that quickly.”
AI headwinds
Some experts argue that even with rapid AI adoption, layoffs might unfold over months or even years. Many firms might choose to downsize through attrition or hiring freezes, rather than abrupt layoffs.
However, McMillin conceded that concerns are justified. Credit card delinquencies are rising, SaaS valuations are under pressure, and it’s entirely possible that consumer credit quality may deteriorate over time. He posited that the timeline for any crisis could be longer than Hayes anticipates.
Hayes pointed out that the market has spoken on this, hinting at gold’s recent strength compared to Bitcoin’s fall.
He noted that gold’s rise amid Bitcoin’s decline hints at a risk-off credit event within the Pax Americana framework. Should this play out, he expects the Federal Reserve might resort to printing money to prevent a banking crisis.
Gortra agrees that the Fed would respond vigorously. For Bitcoin, such scenarios matter because they gradually shift how investors perceive the resilience of the monetary system. Significant liquidity interventions can bolster the case for assets with limited supply.
This situation puts Bitcoin traders in a dilemma. Hayes posits that Bitcoin’s drop from $126,000 to $60,000 reflects a broader correction and suggests two possibilities: either stocks will adjust to this correction, or Bitcoin may fall further as stocks respond to market conditions.
The outcome could be quite similar: a substantial amount of money will likely be printed, leading to Bitcoin hitting a new all-time high.
“AI is arguably the most revolutionary technology in human history,” Hayes concluded. “In light of these realities, the Fed needs to report more than ever.”
Bitcoin isn’t expected to recover soon; it dropped 2.5% in the last 24 hours and has fallen 27% over the past month. Currently, it trades around $67,000 per coin.
