From "AI Deflation" to "War Inflation": Is a New Round of Bitcoin Rally Taking Shape?

Arthur Hayes sent a key signal at the "Bitcoin 2026" conference:
The market narrative for Bitcoin is shifting.
In the past, the market worried that—AI improving efficiency would bring "deflationary pressure," suppressing risk assets;
But now, a new variable has emerged: geopolitical conflicts are pushing up inflation expectations, and may even trigger a new round of credit expansion.
His core logic is actually very simple:
When the "money printing expectation" re-emerges, Bitcoin is no longer just a tech narrative, but returns to a hedge against currency.
He mentioned that the US-Iran conflict is strengthening market expectations of "war-time inflation," while banking system liquidity is improving, potentially offsetting the credit contraction caused by AI. In other words—
Liquidity is no longer tightening; it may even loosen again.
More importantly, his liquidity indicator bottomed out as early as November last year and has been highly synchronized with Bitcoin's price movements.
This means: this rally may not be driven by sentiment, but by "money."
Therefore, he maintains a bullish view and even sets a target of $125k.
But to understand the key point, it’s not the price, but the change in logic:
When the market shifts from "deflation fear" to "inflation expectation,"
Bitcoin’s pricing system will undergo a fundamental change.
Finally, a candid remark:
Market trends are never launched suddenly; it’s the perception that changes first, followed by price movement.
Most people only enter when the trend is confirmed, but those who truly profit are already positioned when the logic just shifts.
Opportunities always reward those who see one step ahead of the market, not those who run the fastest.
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