Could the Burst of the AI Bubble Ultimately Benefit Bitcoin?

Artificial Intelligence: "Is it Technology or Real Estate?"

It is impossible to ignore the current development of artificial intelligence, as well as the speculative euphoria that accompanies its deployment through massive capital expenditures (CAPEX), particularly aimed at providing the necessary infrastructure to operate with an increasing number of energy-intensive data centers.

This situation involves colossal amounts, as when the industry giant Nvidia recently struck a deal with several Wall Street titans - including Apollo, BlackRock, Goldman Sachs, and KKR - to mobilize $500 billion to finance AI infrastructure, while its market capitalization surpassed $5 trillion at the end of last year.

This prompted the famous crypto analyst Arthur Hayes to question this explosive and shaky situation in a blog post titled "Situationship," which examines the development of AI from an unexpectedly interesting angle: "Is it technology or real estate?"

The current trend suggests that this deployment, representing several trillion dollars, is "technology" and thus deserves outrageous growth multiples from the market. For my part, I believe that the CAPEX related to AI is just another boring real estate investment. Arthur Hayes

AI Bubble: Towards a Credit Crisis Like 2008?

Once this shift in perspective is established, Arthur Hayes addresses the disconnect it implies for investors who position AI as a technology, while it resembles much more a leveraged real estate project based on its underlying infrastructures.

The risk? Under control, if artificial intelligence meets the expected demand. But it could quickly become much more complicated if the generated revenues do not adequately compensate all the invested capital, with the prospect of a credit real estate crisis reminiscent of 2008, much more likely than the scenario of the Internet bubble burst.

Arthur Hayes does not criticize the financial potential of AI or its ability to revolutionize current society. He more precisely issues a warning about the risk of a credit crisis, involving massive losses for lenders and a contraction of liquidity, rather than a simple correction of tech stocks.

A crisis that would ultimately lead to government intervention to prevent a massive collapse through a massive liquidity injection... which could benefit Bitcoin.

A Windfall for Bitcoin?

For the goal of this analysis is not even really AI or the collapse of its bubble - financial or real estate - but the bullish potential that the monetary response to a possible credit crisis could ultimately trigger for Bitcoin.

But caution is still warranted, as the potential crisis discussed by Arthur Hayes could still prove very problematic for the BTC price in the short term, following a massive sell-off of risky assets.

However, the situation is quite different in the long term, especially following the supposed triggering of massive monetary creation by central banks, in the context of a second phase expected to be very favorable to Bitcoin due to its status as a scarce asset.

A strength of Bitcoin that recently allowed macro investor Jordi Visser to present it as one of the most resilient assets to change, like the major upheavals announced by AI in the coming years, especially considering the recent American intervention to support the Japanese yen, which he argues "shows that the United States is in trouble."

Sources: Arthur Hayes, Wolf of All Streets

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