BitMEX co-founder Arthur Hayes warns that bitcoin’s recent rout is flashing an ominous macro signal — and that an even bigger Fed intervention could ultimately send BTC to new record highs. In a new essay titled “This Is Fine,” Hayes points to bitcoin’s 52% slide from an October peak of roughly $126,000 to around $66,501.80 as a “global fiat liquidity fire alarm.” While the Nasdaq has held relatively steady, bitcoin’s deeper drop, he argues, shows markets are already pricing in a severe credit event that equities have not yet acknowledged. Hayes lays out a stark scenario driven by artificial intelligence: if AI displaces just 20% of America’s roughly 72.1 million knowledge workers, the result could be approximately $557 billion in consumer credit and mortgage defaults — about half the shock of the 2008 financial crisis. That scale of consumer distress, he says, would hit regional banks hard and force the Federal Reserve into “the biggest money printing in history.” “Bitcoin is the most responsive freely traded asset to the fiat credit supply,” Hayes writes. He sees the recent divergence between bitcoin and tech stocks as an early warning that significant credit destruction is imminent. He also flags the relative strength of gold versus bitcoin as another warning sign: “a surging gold versus a slumping Bitcoin clearly tells us that a deflationary risk-off credit event within Pax Americana is brewing.” Hayes’ playbook is straightforward: first, credit-sensitive assets like bitcoin will price in the damage; then, panic-driven policymakers will flood markets with liquidity. He colorfully predicts central bankers will “press that Brrrr button” harder than they have before, and that expectation of sustained money printing will propel bitcoin “off its lows” and eventually to fresh all-time highs. That upside, however, comes with pain along the way. Hayes cautions BTC could drop further — potentially below $60,000 — if political dysfunction delays Fed action. His advice to crypto investors is conservative: remain liquid, avoid leverage, and wait for the Fed’s “all-clear” before aggressively re-entering risky assets. Bottom line: Hayes frames bitcoin today as a market thermometer for fiat liquidity risk — a leading indicator that could plunge further in a real-world banking shock, but that also stands to rally dramatically once large-scale Fed intervention restores market liquidity. Read more AI-generated news on: undefined/news

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