Key Insights:
- Hayes references Bitcoin news, noting Bitcoin-Nasdaq divergence signals a looming dollar liquidity shock in U.S. credit markets.
- AI-driven job losses could spark $330B consumer and $227B mortgage losses for U.S. banks.
- Fed liquidity response may follow deflationary stress, shaping Bitcoin’s next major price move.
Bitcoin news turned to former BitMEX CEO Arthur Hayes after he argued that Bitcoin’s recent split from the Nasdaq 100 signals a looming dollar-liquidity shock. He described Bitcoin as a fast-moving gauge of global fiat credit conditions. He said the divergence warrants closer attention from traders who treat Bitcoin as a tech-linked risk asset.
Hayes wrote that when Bitcoin and the Nasdaq move in different directions, markets may be discounting a deflationary credit event. He framed the risk as credit destruction in the U.S. financial system, driven by weakening loan performance. He also said the market could be front-running stress in dollar funding and consumer balance sheets.
Hayes laid out a two-part sequence that he expects in a severe downturn. First, he said markets reprice debt assets as losses rise on bank balance sheets. Then he argued that policymakers would respond with aggressive liquidity support, which he expects will lift Bitcoin later.
Bitcoin News: Hayes Ties Bitcoin-Nasdaq Divergence to Dollar Liquidity
Hayes said Bitcoin acts like a “fire alarm” for fiat liquidity because it trades freely and reacts quickly to changes in credit supply. Therefore, he pointed to Bitcoin’s divergence from the Nasdaq 100 as the key signal. He said many investors still treat Bitcoin as a leveraged proxy for large U.S. technology stocks.
He argued that a deflationary phase can pressure Bitcoin at first, before later policy support changes the trajectory. In his framing, according to Bitcoin news, the policy response matters most for assets sensitive to fiat credit creation. He also wrote that the timeframe can vary, ranging from months to years.
Hayes compared the process to the 2008 global financial crisis, which he called the most severe credit deflationary episode of this century. He cited the lag between major economic shifts and a full banking-system break.
In addition to Bitcoin news, Hayes built a simplified model focused on white-collar “knowledge workers” and loan defaults linked to AI adoption. He cited U.S. Bureau of Labor Statistics data showing that knowledge workers numbered 72.1 million out of a total workforce of 164.5 million. He also used Federal Reserve figures showing total consumer credit at $5.1 trillion.
He then removed student loans and put consumer credit held by banks at $3.76 trillion. Next, he used income and housing assumptions for knowledge workers, including an average income of $85,000. He also stated that the homeownership rate for that income decile is 74% and that 42% of homeowners have a mortgage.
Hayes used an approximate average mortgage balance of $250,000 for knowledge workers. He then modeled a scenario in which 20% of those workers lose their jobs due to AI tools. Based on that scenario, he wrote that markets would price $330 billion in consumer credit losses and $227 billion in mortgage debt losses.
Hayes then compared those losses to bank reserves and overall commercial bank equity. He wrote that the shock could translate into a 13% write-down across U.S. commercial bank equity capitalization. He added that system-wide averages can mask weaker institutions, especially smaller banks with higher leverage.
Two scenarios for Bitcoin, Plus Gold and Fed Response Expectations
Bitcoin news coverage of Hayes also highlighted a two-scenario path for traders. He said Bitcoin’s drop from $126,000 to $60,000 could mark the full downside move, with equities catching up later. Alternatively, he said Bitcoin could fall further if stocks decline into the same risk-off event.
Hayes also pointed to gold’s strength against Bitcoin price slide as another market signal. He wrote that rising gold prices during Bitcoin weakness suggest a deflationary, risk-off credit event may be building. He said that if such stress hits, he expects the Federal Reserve to step in with major liquidity measures.