Hayes Predicts Bitcoin Could Reclaim $126K Peak on AI Arms Race and Iran Conflict
Maelstrom CIO Arthur Hayes believes escalating AI infrastructure investments and the Iran conflict will drive increased monetary expansion in the US and China, setting the stage for a strong Bitcoin and cryptocurrency market recovery.
Arthur Hayes, serving as chief investment officer at crypto investment fund Maelstrom, believes the ongoing conflict in Iran combined with the global competition for artificial intelligence supremacy will drive monetary expansion that stands to benefit the cryptocurrency market and potentially propel Bitcoin to reclaim its all-time high price point before the year ends.
Writing in a Substack post published on Tuesday, Hayes explained that the arms race between the United States and China has pushed both nations toward implementing looser monetary policies and increasing fiat currency creation, as AI technology is "directly relates to national security."
"The combination of the political will to win the AI race and the financial will to fund the build-out with printed money and bank loans produces the perfect environment for crypto," he said.
Hayes further elaborated that "There will be vastly more units of fiat tomorrow than today, and the rate of change is accelerating due to rapidly increasing yearly AI and electrification CAPEX expenditures."
The broader cryptocurrency sector reached record highs throughout last year, with total market capitalization peaking at $4.28 trillion in October, per CoinMarketCap data. Nevertheless, the market experienced a downturn as the year drew to a close, leaving market analysts divided on the timeline for a complete recovery.
Bitcoin to $126,000 is a "foregone conclusion"
According to Hayes, warfare inherently drives inflation, and the conflict involving Iran follows this pattern. Government defense expenditures combined with nations redirecting capital toward domestic infrastructure projects instead of US Treasurys and equities will result in additional money printing.
Hayes had also forecasted in March that the US Federal Reserve might adopt easier monetary policies to support funding for the nation's involvement in the Iran conflict, which would provide a boost to cryptocurrency markets.
Hayes stated that "The politicians support this money printing out of real and perceived necessity. That is why Bitcoin post-February 28th is outperforming the other major risky assets such as gold and US tech stocks."
Over the last seven days, Bitcoin has fluctuated within a range of $79,467 to $82,496, per CoinGecko data. The cryptocurrency was hovering around $81,000 on Wednesday, representing an increase of more than 31% compared to its Feb. 6 low of $62,822. During the same period, gold prices moved from approximately $4,581 at the beginning of February to $4,710, marking a 2% gain.
Hayes declared that "Bitcoin bottomed earlier this year at $60,000, and with a tailwind of trillions of dollars and yuan yet to be created at its back, retaking the $126,000 is a foregone conclusion."
"I expect the rally to intensify and the haters to cower in the corner as Bitcoin's upward price trajectory turns explosive after punching through $90,000, where many call over-writers will rush to cover as their strike gets taken out."