Arthur Hayes says the cryptocurrency crowd is taking a hit while still fighting over the cause of the decline. In his latest article, Arthur warns: “I don’t know anything about fighting wars,” and makes clear that he has no inside line on what world leaders might do next.
What he’s saying is that he has public data, basic mathematical calculations, AI propagandists, and a wallet to protect.
He says there are actually four possible outcomes, but one of them is not feasible for investors. Nuclear destruction is not something he thinks anyone could trade, so he gets rid of it. This leaves three main paths, plus an intermediate case linked to the US blockade. Arthur says he is trying to find a portfolio setup that can beat hydrocarbon, food and fuel prices at best, and at worst still perform better than most major assets.
Arthur Hayes says Bitcoin’s comeback awaits liquidity injection from the Fed
In the first case, Arthur says the war stopped and things went back to the way they were before, but that still wouldn’t solve the deeper problem because the bigger threat is that AI will replace white-collar workers throughout the American economy.
“The US economy is most at risk because its GDP is driven by consumer spending by about 70%,” says Arthur. “Consumers finance their finances using bank credit, and these loans become assets on banks’ balance sheets.”
Arthur says an AI-led bankruptcy could be as serious as the subprime mortgage chaos of 2008. He writes that rising rates of consumer delinquency are already showing up before the real wave of layoffs begins.
It also offers a story from a cryptocurrency gaming founder who tested the latest Claude model over Christmas 2025, quickly built usable code, and then brought senior engineers together to rethink the company.
Next, the company built an agent workflow that coded throughout the day and night, including code review. He says that has prompted the company to plan 50% staff cuts. He adds that senior engineers may have 10 to 100 times more productivity, while rank-and-file workers are left out. He says the average annual unemployment compensation in the United States is about $28,000, which is far less than the $85,000 to $90,000 that many knowledge workers earn.
This gap, according to Arthur, directly leads to missed debt payments. Until then, Arthur says Bitcoin may only have a limited bounce, perhaps to $80,000 or $90,000, until the Fed steps in with real liquidity.
Arthur tracks yuan fees, oil squeezes, and money printing through bitcoin, gold, and bonds
In the second case, Arthur says, Iran maintains control of the Strait of Hormuz and allows friendly ships to pass after paying a $2 million fee in yuan, cryptocurrencies, sanctioned dollars, or other deals.
He says that would hit the petrodollar hard. Since most major economies run trade deficits with China, they would need to sell US Treasuries or technology stocks, buy physical gold, and then exchange that gold for yuan in Shanghai or Hong Kong. He points out that only Brazil and Russia are among the top ten economies that have trade surpluses with China.
Arthur noted that the Fed’s foreign securities holdings declined by $63 billion after the war began, while non-monetary gold has become the largest U.S. export in four of the past five months, up 342% from the previous year. He also says Swiss refiners are recasting US gold for China, and that higher CIPS volumes are important because Iran cannot use SWIFT. As Arthur says:
“The yuan and gold will likely become the primary currencies in sovereign trade. If holding dollars doesn’t guarantee that pirates won’t move your stuff, why hold them at all?”
In the third case, the US military forcefully reopened the strait. That could briefly restore confidence in the dollar, Arthur says, but it could also devastate Iran, destroy energy production in the Gulf, and force central banks to cause commodity prices to soar. “The spices definitely won’t flow,” he writes. He says some countries will face hyperinflation, while America and Russia will be the only major producers left.
As for Bitcoin, Arthur He says“If the blockade is ultimately ended by a punitive bombing campaign on Iran followed by Iranian destruction of all energy production in the Persian Gulf, it could lead to the destruction of the Iranian state. The rise in Bitcoin, inspired by money printing, may be short-lived because the destruction of the Iranian state materially increases the possibility of World War III.”
