Federal Reserve Vice Chair for Supervision Michael Barr has issued a significant warning about the economic impact of artificial intelligence, urging policymakers to prepare for "short-term disruptions" in the labor market as AI adoption accelerates through 2025. Barr's analysis, presented at a policy symposium, highlights that while AI promises long-term productivity gains, the transition period poses substantial challenges, with approximately 30% of current work activities facing potential automation by 2030.
Arthur Hayes, co-founder of BitMEX and CIO of the Maelstrom fund, interprets Bitcoin's recent price action as an early warning signal for these very disruptions. Hayes points to a growing divergence between Bitcoin and traditional equities, notably the Nasdaq 100. While Bitcoin has declined from its October 2025 all-time high of $126,080 to around $67,000, the Nasdaq has remained largely flat. Hayes argues this decoupling reflects Bitcoin's sensitivity to fiat credit conditions and its role as a leading indicator for an impending dollar credit crunch triggered by AI-driven white-collar job losses.
Hayes estimates that if AI displaces 20% of the 72.1 million U.S. knowledge workers, it could trigger roughly $330 billion in consumer credit losses and $227 billion in mortgage losses for commercial banks. He contends that Bitcoin is the first to react to these liquidity headwinds, while traditional markets have yet to price in the full scale of the disruption. In his view, this scenario will eventually force the Federal Reserve to enact massive monetary stimulus, which would ultimately propel Bitcoin to new highs.
Not all experts agree with Hayes's immediate timeline. Ryan McMillin, CIO of Merkle Tree Capital, acknowledged the directional concern is coherent but argued that "labor markets don't work that cleanly," with AI-driven redundancies likely unfolding over quarters and years rather than weeks. Colin Goltra, CEO of Morph, noted that Bitcoin's relationship with equities is not static and short-term divergences are not new.
Vice Chair Barr emphasized that monetary policy alone cannot address these structural shifts, advocating for coordinated responses involving education reform, workforce development, and enhanced social safety nets. The Fed's role will be to monitor economic stability indicators—such as wage growth, unemployment duration, and labor force participation—during the transition period projected from 2025 to 2030.
