Here’s how bitcoin’s price rise could be fueled by job-stealing AI software
The future of Bitcoin in a world driven by artificial intelligence may rely more on the actions of central banks than on the underlying code of the cryptocurrency. According to Greg Cipolaro, the global head of research at NYDIG, artificial intelligence will impact Bitcoin through macroeconomic channels and its influence on the labor market.
Cipolaro highlights key variables such as growth, employment, real interest rates, and liquidity, stating that Bitcoin is downstream of these forces. If automation leads to job cuts and lower wages, consumer demand could decrease, potentially causing financial strain on individuals and asset prices. Recent job cuts at Jack Dorsey’s fintech firm Block, attributed to AI-enabled efficiency, exemplify these concerns.
In response to potential economic instability, policymakers may implement lower interest rates or fiscal spending to stabilize the economy. This influx of liquidity could benefit Bitcoin, as the cryptocurrency has historically correlated with changes in global money supply. On the other hand, if AI enhances productivity without significant job losses, real yields may rise, prompting central banks to maintain tight monetary policies. Higher real rates have historically negatively impacted Bitcoin by increasing the opportunity cost of holding the cryptocurrency.
The anxiety surrounding AI-induced disruptions mirrors past technological advancements that reshaped industries and displaced workers. Despite initial fears of permanent job loss, historical patterns suggest that new technologies ultimately lead to expanded productive capacity and the creation of new industries. Cipolaro believes that AI, as a general-purpose technology, will follow a similar trajectory, with firms adapting to integrate AI into their workflows rather than rendering existing systems obsolete.
The integration of AI may also pave the way for agentic payments, facilitating machine-to-machine transactions without human intervention. While Bitcoin’s early vision included machine-to-machine payments, widespread adoption hinges on addressing current incentives that favor credit cards over stablecoins. Ultimately, the human response to AI-induced disruptions will determine Bitcoin’s trajectory, whether it be through a deflationary shock prompting monetary intervention or a productivity boom leading to increased real yields.
As the intersection of AI and Bitcoin evolves, it will be crucial to monitor how central banks and policymakers respond to economic shifts driven by artificial intelligence. The cryptocurrency’s future may be intricately linked to macroeconomic trends influenced by advancements in AI technology.
