Arthur Hayes: Oil Price Surge, AI Super IPO Frenzy, and Trump's Anti-AI Comments Could Pop the AI Bubble, Dragging Down the Entire Crypto Market

June 9: BitMEX co-founder Arthur Hayes laid out his latest analysis in a piece titled “Reality Test,” warning that ongoing oil price hikes spurred by U.S.-Iran tensions could trigger a collapse in the AI stock bubble and drag down the broader crypto market. Hydrocarbon energy and oil prices are key drivers of the global investment system, Hayes noted. If traffic through the Strait of Hormuz remains restricted through the deep second quarter, spot prices for hydrocarbons and other critical commodities could surge sharply in the third quarter. Further oil price gains stoking inflation ahead of the U.S. midterm elections could prompt former President Trump to adopt a hardline stance on data center construction, AI regulation, and corporate taxes to win voter support. Markets may mistake this election strategy for actual policy, Hayes argued, leading investors to price in Trump clamping down on AI capital spending and levying taxes on AI companies—eventually sparking the AI stock bubble to burst. Additionally, Hayes pointed out that AI has absorbed massive U.S. dollar liquidity in recent years. His estimates show that since November 2022, AI-related debt issuance has reached roughly $15 trillion, matching the approximately $15 trillion increase in U.S. M2 over the same period. This, he says, explains why Bitcoin has failed to rally significantly despite the expansion of U.S. dollar liquidity. The three potential triggers for an AI bubble burst are: rising energy costs, the market’s inability to absorb major IPOs from three AI firms (SpaceX, Anthropic, and OpenAI), and Trump’s shift to opposing AI. If AI stocks drop, investors will lack the extra capital to buy Bitcoin, banks will tighten lending, and credit contraction will suppress overall market liquidity. On the portfolio front, Hayes said Maelstrom’s stock portfolio holds a large position in U.S.-listed energy producers, while it has sold off AI-related stocks and non-core crypto assets. Last week, the firm sold HYPE, NEAR, and WLD; it also offloaded ZEC due to an exploit in its Orchard Pool product. The portfolio still holds Bitcoin and Ethereum. Hayes warned that an AI bubble burst could spark a financial crisis, leading to large-scale liquidity expansion—meaning Bitcoin may dip before rallying. He also plans to execute tactical short selling via derivatives.