Bitcoin’s future in an artificial intelligence-driven world may depend more on central banks than code.
Greg Cipolaro, head of global research at financial services and infrastructure firm NYDIG, argued in a new note that artificial intelligence will impact Bitcoin primarily through macroeconomic channels and its impact on the labor market.
The key variables are growth, employment, real interest rates, and liquidity. Bitcoin is downstream from those forces, he writes.
Automation-induced job and wage cuts could weaken consumer demand, and in severe cases, lower incomes could put pressure on debt servicing and asset prices.
These concerns appear to be well-founded. Just this week, Jack Dorsey’s fintech company Bloc announced it would cut its workforce by about 40% and shrink to its pre-pandemic size. Dorsey cited AI’s efficiency in reducing headcount, something theorized in Citrini’s study on AI doom that shocked the market this week.
In such a scenario, policymakers may respond with interest rate cuts or fiscal stimulus to stabilize the economy. This wave of liquidity could support Bitcoin, which has followed changes in the global money supply.
A different outcome would be less favorable for cryptocurrencies. If AI boosts productivity and economic growth without significant job losses, real yields may rise and central banks may maintain tight policy.
Rising real interest rates have historically weighed on Bitcoin by raising the opportunity cost of holding it and making it a less attractive risk asset.
Changes in demand
The anxieties surrounding AI reflect past turbulent moments in human society.
Steam engines replaced manual labor in factories and farms. Then, electrification rewired entire industries. Computers and the Internet then automated office tasks and reshaped retail, media, and finance.
Each wave brought fear of permanent job loss. In the early 1900s, factory mechanization replaced skilled craftsmen with machines, causing labor unrest. In the 1980s and 1990s, personal computers reduced the number of typists and office staff. More recently, e-commerce has helped hollow out the role of brick-and-mortar retailers.
However, aggregate demand did not collapse. Productivity has improved. New industries absorbed displaced populations, even if the transition was uneven and painful. Today, industries that were unimaginable in the early days of the Internet exist. Consider cloud computing.
Cipolaro argued that AI could follow a similar pattern. As a general-purpose technology, companies need to redesign their workflows and invest in complementary tools. Over time, the process tends to expand rather than contract production capacity.
“This does not mean that disruption is painless, but rather that historically the equilibrium response to new technology has been integration rather than obsolescence,” Cipolaro wrote. “Society’s response to AI will likely follow the same pattern.”
For Bitcoin, that distinction is important. If AI ultimately boosts long-term growth, the structural context may be different from the short-term shocks that often cause liquidity injections.
On the other hand, recruitment may also increase thanks to agent payments. Agent payments essentially involve software making payments to other software without any human involvement. One of Bitcoin’s early visions focused on machine-to-machine payments, and AI may be the tool needed to make them a reality.
Still, there is currently no incentive for widespread deployment. Cipolaro pointed out that credit cards come bundled with perks and short-term credits, features that stablecoins don’t yet have.
Ultimately, the rise of AI brings new challenges, but what matters is how humans respond to the disruption it brings. If AI causes a deflationary shock that forces the money printing presses to turn back on, or if AI fuels a productivity boom that drives real yields higher, Bitcoin will reflect that.
