- A new report on AI has rattled analysts.
- The report estimates that AI will decimate jobs and the world economy.
- However, Arthur Hayes and other analysts say that could be great for Bitcoin.
First, Alap Shah said artificial intelligence will nuke the world economy.
Then, the report he co-authored with Citrini Research further inflated AI bubble fears and triggered a mass selloff of everything from delivery to payment stocks — an event that dragged cryptocurrency prices down with it.
Now, the Lotus Technology Management chief investment officer says he is surprised by how visceral the reaction to the paper’s vision of the future was.
“I thought there was going to be a small reaction, “ Shah told Bloomberg after his screed went viral over the weekend. “It was definitely larger than we expected.”
The report outlines a potential future based on one core thesis: that AI will only get smarter, replace troves of white-collar workers, and decimate consumer spending, laying waste to a slew of industries and even countries’ economies.
Industries like insurance, banking and food delivery are just some sectors that would be affected by the onslaught, Shah and Citrini Research, the independent research firm, wrote.
The report came at a troubling time for the crypto industry.
The general tech selloff pulled Bitcoin’s price below $63,000 for the first time since October, deepening a major market pullback that has shaved over $2 trillion off the digital asset’s market cap, roughly half of its record high in October.
Yet, crypto market watchers are bullish.
The dark future outlined in the Citrini report could even benefit the crypto industry, experts, including Maelstrom’s CIO Arthur Hayes, say.
Pump Bitcoin
The Citrini report only mentions crypto in passing. It notes that AI agents, programmes powered by large language models, will automate commerce.
When they do, they’ll likely choose to use stablecoins rather than traditional payment rails, due to their near-instant settlements and transaction cost “measured in fractions of a penny.”
This will likely, Citrini and Shah write, lead to a decline in payment companies’ stock prices.
Yet the mass layoffs and economic slump envisioned in the report could pump the price of Bitcoin and other cryptocurrencies.
Laurens Fraussen, research analyst at Kaiko, says this is essentially what happened when the US Federal Reserve stepped in after the pandemic.
“When the economy is in the gutter, the Fed often ramps up money printing,” Fraussen told DL News. “
“Bitcoin goes up in response to the increased money supply and concerns about currency debasement,” he said.
Hayes, the co-founder of BitMEX, made a similar prediction earlier in February, saying that the US central bank will have to plough liquidity into the economy to avoid a repeat of the 2008 financial crisis.
“Deflation is bad, but ultimately good for fiat credit-sensitive assets like Bitcoin,” Hayes wrote in a February 17 blog.
Eric Johansson is DL News’ managing editor. Got a tip? Email him at eric@dlnews.com.
