Custodia CEO says Bitcoin is decoupling from Nasdaq (4:32)
Billionaire crypto trader Arthur Hayes is sounding the alarm on Bitcoin’s (BTC) recent divergence from the Nasdaq.
He warned that this could be the first tremor of a larger credit crisis.
In a blog post on Feb. 18, the former BitMEX CEO argues that Bitcoin acts as a “global fiat liquidity fire alarm.”
When it moves sharply against major equity indexes like the Nasdaq-100, investors should pay attention.
The Nasdaq-100 index tracks the 100 largest non-financial companies listed on the Nasdaq exchange, and is heavily weighted toward technology sector.
Many market participants have treated Bitcoin as a high-beta proxy for U.S. tech stocks. But Hayes says that the relationship may be breaking down and not in a good way.
Related: Custodia CEO says Bitcoin is decoupling from Nasdaq
Bitcoin’s divergence from Nasdaq raises red flags
Since hitting its all-time high in early October last year, Bitcoin has plunged while the Nasdaq has remained relatively flat. To Hayes, that decoupling signals tightening liquidity and looming credit destruction.
His thesis is blunt. Bitcoin is more sensitive to shifts in fiat credit than tech stocks. If it sells off aggressively while equities remain stable, it suggests the market is pricing in deflationary stress before it becomes obvious in traditional assets.
Hayes believes that artificial intelligence (AI) could be the trigger. He argues that rapid AI adoption may displace a meaningful share of white-collar knowledge workers, impairing their ability to service consumer debt and mortgages.
If even 20% of knowledge workers lose their jobs, Hayes estimates banks could face hundreds of billions of dollars in consumer credit and mortgage losses. That could lead to regional bank failures, deposit flight and a broader contraction in credit.
"This AI financial crisis will restart the money printing machine for real."
In his framework, Bitcoin’s slump toward $60,000 may already reflect early pricing of that risk.
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Deflation first, money printing later
Hayes does not see the story ending with a collapse. In fact, he views deflation as the setup for Bitcoin’s next major rally.
The sequence, as he describes it, is familiar. First comes credit impairment and forced deleveraging. Weak banks wobble, markets panic, and then central banks intervene aggressively.
He points to the 2008 global financial crisis as precedent. Severe credit destruction ultimately forced the Federal Reserve into years of quantitative easing. In Hayes’ view, a similar playbook will unfold if AI-driven job losses trigger widespread defaults.
"I expect a similar thrust higher in Fed monetary shenanigans in 2026 once a wide swath of non-TBTF [Too Big to Fail] banks will go under if they don’t solve their internal political squabbles and print [that] money."
But timing matters. Hayes warns that Bitcoin could fall further if stocks finally “meet their maker” and broader risk assets reprice. He outlines two scenarios,
"Either Bitcoin’s dump from $126,000 to $60,000 was the entire downward move and stonks will catch up, or Bitcoin will dump further as stocks meet their maker."
Stay nimble as liquidity shifts
Despite his long-term bullish stance, Hayes advises caution. He argues that the Federal Reserve typically waits for a visible crisis before unleashing large-scale liquidity support.
Until then, leverage is dangerous.
"I don’t believe Bitcoin traders will see through to the eventual Fed banking bailout until consumer credit-sensitive stocks experience serious pain. I won’t short the market, but long selling to raise cash if one hasn’t done so might be prudent."
His message to traders is raise liquidity, stay flexible and wait for confirmation that central bankers have restarted the money printer. When that signal comes, Hayes believes Bitcoin and select altcoins will be positioned for a powerful rebound.
At press time, the Nasdaq 100 (NDX) was trading 0.95% higher while Nasdaq composite (IXIC) was up 0.94%.
Meanwhile, Bitcoin was down 2.3% in the past 24 hours and was changing hands at $66,356.59.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments are highly volatile and risky. Always conduct your own research before making any investment decisions.
Related: Arthur Hayes predicts Bitcoin to drop $75K before reaching $250K