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Arthur Hayes, co-founder of BitMEX, discusses his thesis that the AI bubble will burst, triggering massive money printing that will drive Bitcoin to $1 million. He explains why he sold his AI token positions and why he remains bullish on Bitcoin and Ethereum for the long term.

Hayes‘ Current Market Outlook and Positioning

• Sold AI Tokens: Hayes sold his positions in Hype, Near, and Zcash due to high risks and took profits. He sees asymmetric opportunities more in Bitcoin and other established cryptocurrencies.
• Capital Preservation over Returns: He prioritizes capital preservation, holding most of his wealth in Bitcoin and T-Bills to maintain mental sanity during volatile markets.
• Opportunity in Ethereum: Hayes considers Ethereum an attractive "mega-cap" coin, trading well below its all-time high of $5,000. He sees a lower risk of total loss compared to newer projects.

The AI Bubble and Its Consequences

• Reasons for the Bubble: Hayes compares the current AI investment wave to the 19th-century railroad boom. He criticizes GPU depreciation schedules (5-6 years) as unrealistic since chips improve every two years. He also highlights circular revenue deals and overvaluation driven by the "USA" brand.
• Chinese Competition: Cheaper Chinese AI models (e.g., DeepSeek) could commoditize US models, destroying investor return expectations.
• Political Risks: Hayes anticipates a political backlash against AI, as the general public doesn't benefit from gains but suffers from rising energy costs and environmental pollution.

The AI Crash as a Catalyst for Bitcoin

• Mechanism: When the AI bubble bursts, banks and central banks will print massive amounts of money. Investors, however, will avoid putting new capital into AI due to poor returns. Instead, printed money will flow into Bitcoin and cryptocurrencies.
• Comparison to Subprime: Hayes calls this potential crash "bigger than subprime" and sees Bitcoin as the ultimate beneficiary.
• Timing: He expects first signs in 2027/2028, when flawed GPU depreciation models become apparent. The political turning point could be the 2028 US presidential election.

Perspectives for Cryptocurrencies

• Current Underperformance: Cryptocurrencies suffer from AI’s dominance as an asset class, absorbing all capital. Bitcoin and Ethereum are therefore undervalued.
• Recommendation: Hayes advises selling AI stocks before the crash, waiting for the subsequent market drop, and then investing in Bitcoin and Ethereum – before the money printing waves begin.

Additional Topics

• Perpetual Swaps: Hayes explains the advantages of perpetual swaps over traditional futures: 24/7 trading, high leverage, and socialized loss mechanisms. He sees Hyperliquid as a potential winner over Binance due to a superior product.
• Energy Market: Hayes expects rising oil prices due to replenishment of strategic reserves, which could further fuel inflation. However, this is irrelevant to AI investors as long as return expectations remain high.

In this episode of the Bankless Weekly Rollup, David and Ryan discuss several key topics:

1. Stock Market Recovery: The S&P 500 hit a new all-time high after a V-shaped recovery, driven by the liquidation of a major fund (Ashen Brener) which removed forced selling pressure.

2. MicroStrategy Selling Bitcoin: Michael Saylor sold 1,638 BTC ($105M) but Bitcoin barely reacted and even rose – a sign that Saylor is no longer the main marginal pricer of Bitcoin.

3. Ethereum Staking Yield Debate: A proposal from EF researchers (including Justin Drake) suggests burning staking rewards once 50% of ETH is staked, effectively driving yields to zero. Proponents argue Ethereum overpays for security and that unlimited staking harms ETH's monetary properties. Opponents (DeFi builders, Lido, Etherfi) warn it would crush solo stakers, scare institutions, and undermine credibility. The hosts believe the proposal is dead in the water ( <5% chance) given strong industry pushback.

4. Cold Card Exploit: A vulnerability in Coldcard's random number generator allowed hackers to brute-force seed phrases, draining over $130M in BTC from offline wallets. Victims did everything right but still lost funds – raising serious questions about self-custody in the age of AI-powered attacks.

5. Other News: Uniswap launches its own token launchpad (pools), the Clarity Act's chances drop to 15%, Cloudflare introduces wallets to protect content from AI bots, Near enables staking for AI inference, and Polymarket seeks a $20B+ valuation.

Overall Market Sentiment: The hosts feel crypto is in a waiting game – meme coins dominate, DeFi growth is slow, and fundamental progress (RWA tokenization, scaling) is incremental. Until the AI trade cools, crypto may remain in the background.

Summary follows...

This video discusses the massive opportunities and changes driven by AI, AGI, and chips. The speaker analyzes where the money is flowing in the age of AI and how to position oneself.

Computing Costs Skyrocket

• In 2025, a gigawatt of compute costs $50 billion, rising to $60 billion in 2026 and $73 billion in 2027.
• Growth rate of about 20–22% YoY.
• Bottlenecks include not just GPUs and servers, but also power supply, cooling, and maintenance.

GPU Rental Market Booms

• H100 GPUs are not obsolete; they are generating more revenue than ever.
• Prices for Blackwell clusters doubled from $2 to $4 per GPU hour in seven months.

SpaceX and Tesla's Terra Fab

• Elon Musk and Tesla plan the world's largest factory: 100 million sq ft (approx. 9.3 million m²) in Texas.
• Goal: Terawatt of compute, split into two product lines:
  • 25% for Tesla Optimus robots
  • 75% for Starship space missions
• Starting 2026, space-based data centers using Nvidia Vera Rubin chips are planned.

High Growth Rates at SpaceX

• SpaceX projects $100 billion in annual revenue by year-end.
• Three scenarios for monthly compute leasing revenue:
  • Conservative: $5.8–7.1 billion
  • Base: $7.5–9.2 billion
  • Optimistic: $10–11.7 billion
• CAGR of 170.4% to reach $1 trillion in revenue by 2029.

Starlink and Telecom Market

• Starlink has over 12 million active subscribers and is growing rapidly.
• CEO Gwynne Shotwell targets $600 billion through partnerships with Verizon, AT&T, and T-Mobile to eliminate "dead zones."

Company Valuations and Stock Trends

• Nvidia's P/E ratio is at its lowest (around 20), despite critics calling AI a "bubble."
• Tesla is seen as a "co-option on SpaceX" as the latter currently steals the spotlight.
• Google loses four top AI scientists but invests in companies like Anthropic and SpaceX.

AI Agents and Crypto

• AI agents increasingly use cryptocurrencies (e.g., Base from Coinbase) since banks are unsuitable.
• Base chain overtakes Solana and Polygon in cumulative transactions (over 150 million AI agent transactions).

Regulation and Risks

• The White House requires OpenAI, Anthropic, Google, and Meta to review AI models 30 days before release.
• 1,130 AI researchers call for slowing AI development due to loss of control.
• The speaker warns that slowing down could give China an advantage.

Outlook: End of Source Code?

• AI could soon convert legacy code (like COBOL or Pascal) directly into binaries, marking the end of traditional software development.

The chip and AI market offers enormous opportunities, but also risks from high costs, regulation, and geopolitical tensions. To position yourself, focus on Nvidia, SpaceX, and AI agent platforms.

• The ECM Aesthetika is a dual boiler with volumetric dosing, priced around €4,000.
• It sets benchmarks in many areas and can keep up with more expensive top machines (Sanremo, La Marzocco) – often even outperforming them.

• Only 6.5 to 7 minutes heat-up time thanks to a self-developed saturated brew group with its own heating element.
• Achieved by overheating and then letting the user cool the machine down.

• Very stable temperatures in KM and WBC protocols (5 and 14 consecutive shots).
• Excellent standard deviation – among the best machines tested in the last 10 years.

• Three programmable buttons for individual water amounts.
• Very good consistency even under load and after recalibration (7/10 points).
• Many other dual boilers (e.g., La Marzocco Linea Micra) lack volumetric dosing – only the more expensive GS3 offers it.

• High-quality, robust, solid build – typical ECM, including accessories.
• Espresso: solid 9-bar brew profile, no complex flow profiling, but can brew almost all coffees very well.

• Very powerful steam reaches milk temperature in just 24 seconds, with a nice rolling phase for creamy foam.
• 2-liter boiler maintains performance through many steaming cycles – ideal for small cafés or events.
• Easy connection to drainage and water supply (rotary pump) for continuous operation.

• Overall a top espresso machine with an excellent balance of temperature, volumetric dosing, and steam – a clear recommendation for serious espresso enthusiasts.
• Further details in the long video and test article.

• The S&P 500 hit a new all-time high (~5,700 points), driven by strong tech stocks (Nasdaq +4% for the week).
• Tech and Consumer Cyclicals dominate; Energy declines due to falling oil prices (hopes for an Iran deal).
• Earnings Season Highlights:
  • Visa, Mastercard – solid results
  • Microsoft (+10%), Amazon (+16%) – strong AI-driven earnings
  • Palantir (+29% in one day) – surprise rally
  • Eli Lilly – continues to be a pharma favorite
  • Apple, Tesla, Coinbase, Strategy – disappointed or were sold off
• Michael Burry shorted Palantir and Tesla – with mixed success.

• Leobold Aschenbrenner (former OpenAI employee) suffered massive losses in July due to 4-5x leverage. Ken Griffin (Citadel) bought the portfolio.
• Despite the setback, the fund is said to be still up 80% (thanks to an Anthropic bet).
• Lesson: Leverage is extremely risky. Successful investing requires unpopular decisions – the opposite of being an influencer.

• Bitcoin has underperformed the Nasdaq by 55% since January 2025, despite seemingly favorable conditions (pro-crypto administration, Fed, SEC).
• Cold Card Hack: Over $100M stolen due to a weak random number generator. Debate about Bitcoin's overall security.
• Outlook: Missing narrative and use case – dependency on Michael Saylor (MicroStrategy) and potential new catalysts.

• Critique of an article calling compound interest a fairy tale – from the author's perspective, untenable.
• Own strategy:
  • Fiat as a 'melting ice cube' – necessary safety buffer (1-3 months of expenses)
  • Base: broad ETFs (MSCI World) + sector weighting (e.g., cyclical vs. defensive)
  • Individual stocks only after pullbacks – current opportunities in:
    1. AI chips (after Q2 correction)
    2. Robotics (megatrend)
    3. Pharma (M&A, e.g., Eli Lilly)
  • Risk management: Don't jump between asset classes; reallocate within the portfolio.

• Upcoming events: Berkshire Hathaway, Nvidia earnings.
• Feedback on format welcome – weekly recap or prefer shorts?

On July 30, 2026, over $100 million in Bitcoin was stolen from ColdCard hardware wallets in minutes. Thousands of users who did everything right were affected – their devices sat untouched in safes. The attack targeted not the hardware, but a 5-year-old firmware bug in the random number generator.

🔍 Technical Root Cause

• A flaw in the Libangu cryptography library caused the true hardware random number generator to be bypassed.
• Instead of 128 bits of entropy, the software fallback (Yasmarang) provided only 40 bits effective security (MK2/MK3) – MK4/MK5 had about 72 bits.
• 40 bits is so weak that a normal laptop can brute-force all possible seed phrases in hours offline.

🛡️ Who Was Safe?

Three groups remained untouched:

• Users who used at least 50 dice rolls during setup (true randomness).
• Users with a strong BIP39 passphrase (additional secret word).
• Users with genuine multisig (multiple keys from different devices).

⚠️ Emergency Protocol for Affected ColdCard Owners

1. Check if your seed was created between firmware 4.0.0 and 5.0.3.
2. Assume the seed is compromised (unless you used dice, a strong passphrase, or multisig).
3. Update firmware – this only protects new seeds, not old ones!
4. Generate a new seed on patched firmware.
5. Move funds now to the new wallet.
6. Never reuse the old seed – treat it as public.
7. Verify the receiving address on the device screen before sending.

Beware of phishing: Never enter your recovery phrase into a website, even one claiming to be a “vulnerability checker.”

🔁 CoinKite’s Response & Lessons

• CEO NVK apologized publicly, halted shipments, and destroyed warehouse inventory with vulnerable firmware.
• The bug went undetected for 5 years because bad randomness shows no visible symptoms.
• Similar bugs existed in other projects (Libbitcoin, Profanity, Trust Wallet) – the problem is systemic.

💡 Conclusion

• Verifiable self-custody (via own randomness, passphrase, multisig) is now the new baseline.
• This incident does not prove exchanges are safer – they have the same weaknesses but less transparency.
• Those who upgrade their setup now will hold Bitcoin in a way that is harder to break than ever before.