Arthur Hayes says the cryptocurrency crowd is hurt while still fighting over the reason for the drop. In his final essay, Arthur warns, “I know nothing about war” and makes it clear that he has no idea what world leaders might do next.
What he says he has is public data, basic math, propaganda AI agents, and a wallet to protect.
He says there are actually four possible outcomes, but only one is useless for investors. He thinks that nuclear destruction is not something anyone can trade in, so he rejects it. This leaves three main paths, plus an intermediate solution linked to a US blockade. Arthur says he tries to find a portfolio setup that can beat hydrocarbon, food and fuel prices in the best case, and in the worst case, do better than most major assets.
Arthur Hayes says Bitcoin comeback awaits Fed liquidity injection
In the first case, Arthur says that the war stops and things go back to the way they were before, but that still won’t solve the deeper problem, because the biggest threat is the replacement of white-collar workers by AI in the American economy.
“The US economy is the most exposed because its GDP is about 70% driven by consumer spending. Consumers finance their materialism using bank credit, and these loans become assets on the banks’ balance sheets,” Arthur explains.
Arthur says the AI-driven bankruptcy could be as bad as the subprime mess of 2008. He writes that growing consumer delinquencies are already showing up even before the real wave of layoffs has begun.
It also tells the story of a crypto game founder who tested the latest Claude model at Christmas 2025, quickly created usable code, and then brought together top engineers to redesign the company.
After that, the company created an all-day, all-night coded agent workflow, including code review. He says this has led the company to plan workforce reductions of up to 50%. He adds that the best engineers can become 10 to 100 times more productive, while average workers are squeezed out. He says the median annual unemployment benefit in U.S. states is about $28,000, well below the $85,000 to $90,000 earned by many knowledge workers.
This gap, according to Arthur, directly leads to missed debt payments. Even then, Arthur says Bitcoin may only get a limited bounce, perhaps to $80,000 or $90,000, until the Fed steps in with real liquidity.
Arthur Tracks Yuan Tolls, Oil Stress and Money Printing via Bitcoin, Gold and Bonds
In the second case, Arthur claims that Iran maintains control of the Strait of Hormuz and lets friendly ships pass after paying a $2 million toll in yuan, crypto, sanctioned dollars or other agreements.
He says it would hit the petrodollar hard. Since most major economies have trade deficits with China, they would have to sell U.S. treasuries or tech stocks, buy physical gold, and then exchange that gold for yuan in Shanghai or Hong Kong. He notes that only Brazil and Russia, among the ten largest economies, have trade surpluses with China.
Arthur pointed out that holdings of foreign securities at the Fed fell by $63 billion after the start of the war, while non-monetary gold became the largest U.S. export in four of the last five months, up 342% from the previous year. He also claims that Swiss refineries are resmelting American gold for China and that the increase in CIPS volumes is important because Iran cannot use SWIFT. As Arthur says:
“The yuan and gold will most likely become the two main currencies of sovereign trade. If holding dollars can’t guarantee that pirates won’t go after your business, why hold them?”
In the third case, the American army reopens the strait by force. Arthur says it could briefly restore confidence in the dollar, but it could also destroy Iran, destroy Gulf energy production and force central banks to rely on a rise in commodities. He writes: “The spice will certainly not flow. » He claims that some countries would face hyperinflation, while America and Russia would be the only major producers remaining.
For Bitcoin, Arthur says: “If the blockade ultimately ends with a punitive bombing campaign against Iran followed by an Iranian destruction of all energy production in the Persian Gulf, this could lead to the destruction of the Iranian state. Bitcoin’s rally, inspired by money printing, could be short-lived as the destruction of the Iranian state materially raises the prospect of a Third World War.”