Why Bitcoin Has Struggled to Rally Higher: Arthur Hayes Points to the AI Spending Boom

Bitcoin Faces Headwinds Despite Expanding Global Liquidity

Bitcoin (BTC) has remained under pressure in recent months, struggling to maintain momentum despite a significant increase in global liquidity. While many analysts expected cryptocurrency markets to benefit from expanding money supply, BitMEX co-founder Arthur Hayes believes another force has diverted capital away from digital assets: the artificial intelligence (AI) investment boom.

As Bitcoin trades below key resistance levels, investors are increasingly looking for explanations behind its relatively muted performance. According to Hayes, the answer may lie in the massive wave of capital flowing into AI infrastructure, technology, and related equities.

Arthur Hayes: AI Has Absorbed Newly Created Dollar Liquidity

In a recent blog post, Arthur Hayes revisited his long-standing thesis that cryptocurrency markets are heavily influenced by fiat liquidity. Historically, increases in money supply have supported risk assets, including Bitcoin.

However, Hayes acknowledged that focusing solely on the amount of money being created overlooks an important question: where that money is actually going.

Following the commercial launch of ChatGPT in November 2022, the AI sector experienced explosive growth. Major technology companies dramatically increased spending on data centers, semiconductor production, cloud infrastructure, and energy resources required to support advanced AI models.

While Bitcoin recovered from its post-FTX lows near $15,000 and climbed substantially over the following years, AI-focused stocks delivered even stronger returns.

Bitcoin vs. AI Investments

Hayes highlighted that:

• Bitcoin increased approximately 7x from its market lows.
• NVIDIA surged roughly 11x during a similar period.
• AI-related investments accelerated significantly throughout 2024 and 2025.
• Institutional capital increasingly favored AI infrastructure over cryptocurrency exposure.

According to Hayes, this shift explains why Bitcoin did not benefit as strongly as many investors anticipated from the broader expansion in money supply.

The Capital-Intensive Nature of Artificial Intelligence

Unlike many digital industries, AI requires enormous physical infrastructure investments.

The sector depends on:

• Advanced semiconductor manufacturing
• Large-scale data centers
• Massive electricity generation capacity
• High-performance computing equipment
• Global cloud infrastructure networks

Hayes estimates that AI-focused companies have collectively issued approximately $1.5 trillion in debt since late 2022 to finance expansion efforts. Of that amount, nearly $1.3 trillion was raised during 2025 as AI competition intensified.

Notably, this figure closely matches estimated growth in the U.S. M2 money supply over the same period.

His conclusion was straightforward:

“AI effectively absorbed much of the newly created dollar liquidity that many expected to flow into Bitcoin and other cryptocurrencies.”

Could More Bitcoin Volatility Be Ahead?

While long-term cryptocurrency adoption remains strong, some market analysts remain cautious regarding Bitcoin’s short-term outlook.

Market analyst Doctor Profit recently suggested that Bitcoin may be entering the fifth stage of a six-stage bear market cycle. This phase is often characterized by:

• Increased price volatility
• Emotional investor sentiment
• Sharp market swings
• Temporary liquidity events

The analyst identified the $40,000-$48,000 range as a potential area where Bitcoin could establish a major cycle bottom if broader market weakness continues into late 2026.

Although opinions differ among analysts, most agree that macroeconomic conditions, liquidity flows, institutional participation, and technological trends such as AI will continue to influence cryptocurrency markets.

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Final Thoughts

Arthur Hayes’ analysis highlights a growing reality in financial markets: liquidity alone does not guarantee higher Bitcoin prices. The rapid expansion of artificial intelligence has created a powerful competitor for investor capital, attracting trillions of dollars in funding and infrastructure investment.

While Bitcoin remains one of the world’s leading digital assets, traders should continue monitoring broader capital flows, technology trends, and macroeconomic developments that influence market performance.

For investors seeking to navigate these changing conditions, a reliable trading partner such as EXTREMFDX can provide the resources and platform functionality needed to stay competitive in today’s financial markets