- Arthur Hayes said investors are paralysed because of AI and the war in Iran.
- There’s no clear reason for Bitcoin to rally, he added.
- Until the Federal Reserve reacts, Hayes recommends staying on the sidelines.
Bitcoin is stuck in a “no-trade zone” and Arthur Hayes isn’t deploying any new capital into the market until the Federal Reserve injects new capital into the economy, he said on Thursday.
In an April 16 essay, the BitMEX co-founder and crypto hedge fund manager explained that his hedge fund Maelstrom “did fuck all trading in the first quarter” of 2026 as two grisly forces left Bitcoin trying to find a direction.
The first is AI. Agents are replacing knowledge workers at scale, threatening a deflationary collapse, Hayes said. Meanwhile, the Iran war is creating chaos in the commodities market that could compel central banks to print money — but only if conditions worsen.
Until that materialises, prompting the Fed to resume money printing, Hayes reckons the risk-reward of the economy doesn’t justify allocating any more money.
To create new dollars, colloquially known as "money printing," the Fed buys Treasury bonds from banks, injecting fresh cash into the financial system.
AI eats jobs
For some time the refrain was that AI will eat your job.
According to Hayes, it’s already happening. He cited a crypto-gaming entrepreneur who automated his engineering workflow using nothing but Claude AI agents.
Another engineer managed to ship in four days a product that was expected to take six months. Half of the company’s staff will be let go within a few weeks, Hayes wrote.
In and of itself that’s a problem, but Hayes reckons the bigger one resides further downstream, in the consumer credit market.
Let’s say a median US knowledge worker earns between $85,000 to $90,000 annually. If they lose their job, and file for unemployment, their income plunges to around $28,000 per year, according to the Bureau of Labour Statistics and the St. Louis Fed. To pay bills and day-to-day living, they’ll have to lean into consumer credit.
What happens if they don’t have enough to pay back that debt?
“There is no other choice but to fall behind on consumer credit payments to banks,” Hayes wrote. “It’s game over for the fugazi fiat fractionalised banking system."
Iran in three
Then there’s the war in Iran.
Hayes outlined three scenarios for the conflict, each of them bringing different implications for Bitcoin.
If the war ends immediately, Bitcoin might bounce as high as $90,000, but Hayes won’t invest until the Fed provides liquidity to plug holes in bank balance sheets.
Bitcoin was trading at around $75,000 on Thursday.
Second, if Iran successfully restricts any shipping through the Strait of Hormuz, and starts collecting tolls in yuan or Bitcoin, countries will sell dollar assets to raise yuan. This could trigger a sell-off in dollar assets, forcing the Fed to turn on the money spigot. Bitcoin rallies only after the money printer turns on, Hayes wrote.
Finally, if the US destroys Iran’s ability to interdict shipping, but Iran takes the Persian Gulf’s energy production down with it, commodity prices spike.
Central banks are left without much choice but to print money to subsidise food and energy. This means Bitcoin rallies, but at great cost.
Pedro Solimano is a markets correspondent based in Buenos Aires. Got a tip? Email him at psolimano@dlnews.com.
