Bitcoin Tied Down by AI and Middle East War... "Wait Until the Fed Prints Money"

▲ Will the AI layoff crisis and the Middle East war derail the Bitcoin rally?..."Wait until the Fed prints money"/Gemini-generated image

As the threat of job losses due to artificial intelligence (AI) and the war in the Middle East converge, the leading cryptocurrency, Bitcoin (BTC), is stuck in a wait-and-see zone, unable to move. A strong warning has emerged from a Wall Street giant, advising against premature investment until the U.S. Federal Reserve resumes printing dollars.

According to DLNews on April 17 (local time), Arthur Hayes, co-founder of BitMEX and CIO of crypto hedge fund Maelstrom, stated in his latest essay that he did not make any trades during the first quarter of this year. He cited artificial intelligence and the Iran situation as the two key threats that have caused the market to lose direction, drawing a line that there is no reason to inject new capital in terms of risk-reward until the Federal Reserve provides liquidity.

The first threat is the concern of deflationary collapse due to the spread of artificial intelligence. Hayes cited the example of a company that plans to complete product development that would normally take six months in just four days using only the AI agent Claude and subsequently lay off half its employees, pointing out that job losses for knowledge workers are becoming a reality. He analyzed that if the average annual salary in the U.S., which was around $85,000 to $90,000, plummets to $28,000 after job loss, it will lead to consumer credit loan defaults and ultimately the collapse of the existing banking system.

Regarding the second factor, the Iran war, he presented three scenarios. First, if the war ends immediately, Bitcoin, which was trading around $75,000 as of Thursday, could rebound to $90,000, but he stated that he would not invest until the Federal Reserve provides liquidity to fill the holes in banks' balance sheets. He also predicted that if Iran controls the Strait of Hormuz and charges tolls in yuan or Bitcoin, it would trigger a sell-off of dollar assets by various countries, forcing the Federal Reserve to loosen its purse strings, at which point the Bitcoin rally would begin.

Finally, the worst-case scenario is if the U.S. neutralizes Iran's control over the strait, but Iran destroys energy production facilities in the Persian Gulf. In this case, raw material commodity prices would skyrocket, and central banks would be forced to print money to cover food and energy subsidies, causing Bitcoin to rise at a tremendous cost. Ultimately, his consistent argument is that a bull market will only come with a full influx of funds into the cryptocurrency market once the Federal Reserve begins printing money, regardless of the scenario.

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