Arthur Hayes, investment director at crypto fund Maelstrom, says that the ongoing “arms race” between the United States and China in artificial intelligence is forcing both nations to loosen monetary policy—creating an environment that favors cryptocurrency. According to Hayes, the war in Iran, coupled with the fierce competition for dominance in the AI sector, will trigger more money printing and could propel Bitcoin to new all-time highs this year.
Competition between the US and China fuels money supply
Hayes highlights that during this period, as both the US and China strive for supremacy in AI on technological and strategic fronts, the two governments are relaxing financial conditions in the name of national security. This policy shift, he argues, enables governments to push more money into circulation and allows banks to increase lending, ultimately providing “the perfect backdrop for the crypto market.”
He also notes that rapidly growing annual investments in AI and electrification (CAPEX) are significantly expanding the volume of fiat money in circulation. According to analysts, this dynamic affects both traditional finance products and crypto assets—with cryptocurrencies, especially Bitcoin, reacting more swiftly to such shifts.
War and internal investment trends
Hayes points out that the ongoing conflict involving Iran has created inflationary pressures, prompting countries to favor domestic infrastructure spending over purchasing US Treasury bonds or equities. This pattern, combined with heightened military expenditures, is accelerating money printing. Hayes contends that “the political drive to win the AI race, combined with the financial mechanism of newly printed money and extended bank credit, is creating a highly conducive environment for crypto.”
“As of tomorrow, there will be even more fiat currency in circulation, and the rate of this change is speeding up considerably. Annual spending in AI and electrification has seen major growth,” as Hayes explains.
Earlier in March, Hayes noted that the US Federal Reserve might loosen monetary policy further to help bankroll the conflict in Iran—a move he thinks could boost crypto assets.
Current landscape for Bitcoin and other assets
The crypto market hit a series of new peaks in 2023, with total market capitalization climbing to $4.28 trillion in October. However, after a pullback at the year’s end, investors have been split on when a sustained recovery might take hold.
Since February 28, according to Hayes, Bitcoin has outperformed other risk assets such as gold and US technology stocks.
“Since February, Bitcoin has pulled ahead of major risk assets like gold and leading US tech stocks,” Hayes notes.
According to CoinGecko data, Bitcoin has traded between $79,467 and $82,496 over the last seven days. On Wednesday, prices hovered around $81,000—a figure marking more than a 31 percent jump from the February 6 low of $62,822. In the same span, gold gained about 2 percent, rising to $4,710 from $4,581. Based on recent CryptoAppsy figures, Bitcoin’s momentum is driving investors to set their sights on record highs once again.
Hayes argues that, after dropping to $60,000 at the start of the year, Bitcoin could revisit its historic high of $126,000, as trillions of new dollars and yuan enter the global economy.
