Key Takeaways:
- Arthur Hayes of Maelstrom targets bitcoin at $125,000 by year-end, citing wartime spending and rising bank lending.
- The Enhanced Supplemental Leverage Ratio, live April 1, could generate $1.3 trillion in new loans per S&P Global.
- Hayes says artificial intelligence (AI) job losses created a credit deflationary event, but U.S. defense spending of $1.5 trillion offsets the drag.
Arthur Hayes at Bitcoin Vegas 2026: BitMEX Co-Founder Flips Bullish on Bitcoin as U.S.-Iran War Shifts Credit Narrative
Arthur Hayes delivered the outlook during a live presentation at Bitcoin Vegas 2026 following a reflective period after ski season, and the remarks cover three interlocking forces he believes are reshaping the credit environment: artificial intelligence-driven job losses, the Federal Reserve transition to incoming chair Kevin Warsh, and a structural shift in how U.S. commercial banks will absorb government debt.
“I’ve turned a bit more bullish, and I’ll explain why,” Hayes said. “It’s time to think about money creation and money printing, and what that means for bitcoin.”
Hayes opened with a candid read of the U.S.-Iran conflict. He said he monitors the spread between the six-month WTI oil futures contract and the front month every morning to strip away political noise and focus on whether commodity flows remain functional. His conclusion was that conditions are stressed but not severe enough to trigger a flight from risk assets.
“Front entries are tending toward the back end, which says that, yeah, sh**’s fu**ed up, but it’s not super-duper fu**ed up, so I can ignore it and continue thinking about other things,” Hayes remarked.
The central argument in Hayes’ presentation is that AI-related job displacement created a quiet credit deflationary event that central banks failed to recognize. He pointed to a Bloomberg chart tracking the Nasdaq, bitcoin, and U.S. tech SaaS exchange-traded funds (ETFs) since the bitcoin all-time high in October.
During that stretch, bitcoin fell roughly 50% while the Nasdaq held flat. The divergence, in his view, traced directly to SaaS companies losing revenue to AI tools that perform equivalent work at a fraction of the cost.
“These stocks got hammered,” Hayes said. “I think that it pointed to a credit deflationary event that was not being recognized by a central bank, so they weren’t printing enough money, and bitcoin followed suit.”
He described AI as the “new subprime,” arguing that knowledge workers who hold high-salary jobs supported by commercial bank loans represent a multi-hundred-billion-dollar credit exposure that has not been priced into bank balance sheets. “I want to fire all of my human accountants and lawyers,” Hayes told the Vegas crowd. He added:
“I can’t wait for Claude to take over. And that is going to have a very bad impact on anyone who has loans out to these folks who earn very, very good salaries.”
Hayes said the calculus shifted when the U.S.-Iran war began in late February. Since then, bitcoin has outperformed both the Nasdaq and SaaS stocks, which he reads as the market repricing from AI deflation to wartime inflation.
“ Bitcoin is now focusing on wartime inflation,” Hayes said. “What is going to change now that there is an explicit admission by the United States and a lot of other countries that they’re on a wartime footing, their defense spending is inadequate, and they need to print more money to build more bombs.”
On the Federal Reserve, Hayes pushed back on the market’s hawkish read of Kevin Warsh. When Warsh was nominated in January, critics flagged his long-standing criticism of the Fed’s large balance sheet. Hayes detailed that those concerns miss a structural constraint: Warsh must work alongside Treasury Secretary Scott Bessent to keep the bond market orderly while the government continues selling debt.
“Warsh is not going to get into a fight with Bessent,” Hayes said. “At the end of the day, we’ve issued $38 trillion of debt, and you need to fund the government. The Federal Reserve will do what it’s asked to do, which is make sure the market is orderly so that people can buy this debt.”
Hayes walked through a balance sheet framework showing how the Fed and commercial banks would execute what he called a swap. Banks holding roughly $3 trillion in Fed reserves would trade those reserves for Treasurys and repos, reducing the Fed’s stated balance sheet without removing liquidity from the system. The net effect on dollar liquidity, he said, is neutral.
“He could get up and tell people that he has engineered a smaller Fed balance sheet,” Hayes said of Warsh. “But in reality, for us as investors, all we care about is the net effect, and the net effect is nothing.”
The third piece of the thesis centers on the Enhanced Supplemental Leverage Ratio, a rule change that went live on April 1. The regulation allows large banks, including JPMorgan and Citibank, to hold fewer reserves against assets, enabling them to absorb more Treasurys and repos. Smaller banks gain room to expand construction and industrial loans.
S&P Global estimates the change will produce $1.3 trillion in new lending. Hayes applied a banking multiplier of roughly three times to project approximately $4 trillion in total credit creation, a figure he argues exceeds the credit destruction caused by AI job losses.
“The great thing about bank lending is it has a higher multiplier than central bank lending, about three times,” Hayes explained. The BitMEX co-founder added:
“So roughly $4 trillion could be created, which outweighs the credit destruction from AI job losses. That’s why I’ve turned more bullish on bitcoin.”
Foreign demand for U.S. Treasurys has flattened even as total debt has climbed, Hayes noted, meaning a new buyer must fill the gap at scale. With defense budgets rising and the Trump administration projecting a new Pentagon budget near $1.5 trillion, roughly 50% above the prior allocation, Hayes stressed that the demand side of the loan equation is already visible.
“Monitor construction and industrial loans,” Hayes said. “You can get that data weekly from the Fed. The credit must flow.” His liquidity index, which he said bottomed in November alongside bitcoin, has since recovered. Hayes closed his Vegas speech by reaffirming his year-end target and framing the current moment as the start of a breakout.
“We’ve had some chop. We’ve had a war. Now it’s time to break out,” Hayes said. “That’s why I believe bitcoin is going higher. I think my end-of-year target is around $125,000.”
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