AI & The Market: A Reasonable Panic?

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On the 22nd of February, a missive from Citrini Research – titled, with a delightful lack of subtlety, “The 2028 Global Intelligence Crisis” – caused a ripple of unease amongst the more… financially invested members of society. It suggested that progress in the field of Artificial Intelligence, that most modern of Golems, might not be entirely without its drawbacks. A rather insightful observation, really, considering we’re essentially teaching machines to be cleverer than us, and then expecting them to remain entirely benevolent.1

Barely had the ink dried on that particular portent of doom, when Block – a fintech powerhouse, and a company that clearly hasn’t consulted any ancient oracles – announced layoffs affecting a rather alarming 40% of its staff. Coincidence? Possibly. Though, one does wonder if the algorithms responsible for workforce planning have developed a taste for human resources, metaphorically speaking, of course.

As of March 19th, the S&P 500 index had experienced a downturn of over 4%. Financial institutions, those paragons of stability, linked to consumer spending – American Express and Capital One among them – fared even worse, dropping by double digits. It’s enough to make a seasoned investor reach for the calming properties of a strongly brewed tea, or perhaps a small, heavily insured dragon.

This confluence of events has led some to posit that a certain cryptocurrency – one that relies on a distributed ledger and a healthy dose of faith – presents a ‘once-in-a-decade buying opportunity.’ A bold claim, certainly. But then, most opportunities involving volatile assets are. It’s rather like betting on a snail race – the odds are long, the excitement is… limited, but occasionally, a snail does win.

Counting on the Alchemists (and Governments) to Intervene

The Citrini report’s central thesis is that improvements in AI productivity will inevitably lead to widespread job displacement, particularly amongst the white-collar workforce. This, in turn, will reduce incomes, curtail spending, and generally upset the delicate balance of economic equilibrium. A rather grim picture, to be sure. Though, one could argue that unemployment has been a feature of human civilization since the invention of the wheel. It just used to involve more manual labor.

However, history suggests that governments, those masters of fiscal illusion, will not simply stand by and allow the entire system to collapse. They will, as they always do, intervene. They will cut interest rates, print money – a practice that, if viewed from a certain angle, is remarkably similar to alchemy2 – and generally attempt to paper over the cracks. This, conveniently, introduces a tailwind for assets like Bitcoin, which, as of this writing, is trading a significant 44% below its previous peak. A bargain, some might say. A speculative gamble, others might retort. It depends on your perspective, and your tolerance for risk.

The United States, for example, has employed this strategy on at least two occasions in recent decades. During the Great Recession, trillions of dollars were injected into the economy through various stimulus programs. Then, during the COVID-19 pandemic of 2020, the government responded with even greater speed and ferocity. It was, one might say, a display of impressive, if somewhat reckless, financial firepower.

Bitcoin, born in the aftermath of the Great Recession, has experienced a rather remarkable appreciation in value – approximately 9,000,000% over the past 15 years. It has, in essence, been a direct beneficiary of the government’s… let’s call it ‘creative’ fiscal and monetary policies. A rather fitting outcome, considering the circumstances.

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Ignoring the Doomsayers, a Modest Future Remains

Headlines proclaiming an AI-induced apocalypse are, naturally, attracting a great deal of attention these days. However, I remain unconvinced. The integration of AI into the economy will be a gradual process, not an overnight revolution. Furthermore, not everything can or will be automated. New jobs will emerge, as they always have throughout history. It’s the natural order of things.

These fears, in my opinion, are overblown. But Bitcoin still possesses significant long-term upside, based on the same argument concerning persistent liquidity booms fueled by increasingly unsustainable fiscal and monetary policies. Even in the absence of a severe recession or a global health crisis, sovereign debt and money supply levels continue to rise. A rather alarming trend, to be sure.

And that trend, unfortunately, is unlikely to change. Which, in turn, supports the case for Bitcoin being a genuinely attractive buying opportunity right now. A speculative one, perhaps. But an opportunity nonetheless. Though, as with all investments, one should proceed with caution, a healthy dose of skepticism, and a firm understanding of the risks involved. And perhaps a small, heavily insured dragon, just in case.

  1. The Guild of Alchemists and Venture Capitalists maintains that any sufficiently advanced technology is indistinguishable from financial magic.
  2. The ancient art of turning base metals into gold has been largely discredited, but the modern practice of printing money achieves a remarkably similar effect.

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2026-03-23 11:23