In “This Is Fine” (Feb 17, 2026), Arthur Hayes argues that Bitcoin is the “global fiat liquidity fire alarm”—the asset that reacts fastest to changes in dollar credit conditions—and he sees a recent divergence between $BTC BTC and the Nasdaq 100 as a warning that a deflationary credit-destruction event could be approaching. He lays out a simple stress model built on the idea that AI-driven layoffs of white-collar “knowledge workers” could trigger waves of consumer credit and mortgage defaults, forcing banks to absorb large losses and potentially replaying a sharper version of the 2023 regional-bank panic as weaker “non-TBTF” banks get sniffed out by markets and depositors flee. Hayes’ punchline is paradoxical but central to his thesis: deflation is scary first but ultimately bullish for Bitcoin, because once the crisis breaks, policymakers inevitably hit the “Brrr” money-printing button, and that surge in fiat liquidity historically becomes rocket fuel for $BTC BTC. He warns there are two paths: either Bitcoin’s prior dump (he references a big drawdown from an October 2025 peak) already priced the pain and stocks will “catch down,” or BTC falls further as equities finally crack, so he advises limiting leverage and waiting for a clear “Fed panic” signal before going full risk-on. $USDC
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