Arthur Hayes warns AI bubble collapse could hit crypto market

BitMEX co-founder Arthur Hayes warned in a blog post titled "Reality Test" that rising oil prices from a U.S.-Iran conflict could trigger a collapse of the artificial intelligence (AI) stock bubble and a subsequent downturn in the crypto market. Hayes suggested that if restrictions on passage through the Strait of Hormuz continue beyond the second quarter, spot prices for crude oil and major commodities could rise in the third quarter. He argued that a surge in oil prices could fuel inflation, making it a key issue in the U.S. midterm elections and potentially prompting President Donald Trump to tighten regulations and taxes on data center investments and the AI industry. According to Hayes, the AI stock bubble could burst as markets begin to price in these potential restrictions. He added that while he continues to hold his Bitcoin (BTC) and Ethereum (ETH), he plans to use derivatives for tactical short positions if this scenario materializes.