The US economy lost 23,000 jobs in July, sharply missing expectations for about 80,000 new positions and shifting market attention toward this week’s inflation data. Revisions also cut previous months sharply, strengthening the case that the labor market is weakening.
Bitcoin ended the previous week with heavy volatility after falling to $62,200 before rebounding by more than $3,000. Could a fresh inflation surprise overturn the market’s post-jobs optimism?
The Kobeissi Letter described the coming five days as another major week for economic data, led by July CPI on Wednesday. PPI follows on Thursday, while retail sales and consumer sentiment arrive Friday.
The CPI report carries the most weight because another hot reading could challenge expectations that weaker employment reduces pressure for further monetary tightening. Meanwhile, a cooler report could support Bitcoin and altcoins by lowering expectations for another rate increase.
The prior CPI reading showed a sizable decline as lower energy costs followed a de-escalation in the Middle East conflict. Since then, deteriorating conditions have brought geopolitical risks back into the market discussion.
Thursday’s PPI report will offer another view of inflation from the producer side. It usually attracts less attention than CPI, yet an upside surprise could add to concerns about persistent price pressures.
Friday’s retail sales release could provide another important signal. Strong spending would show continued economic resilience, while weak sales would support the argument that economic growth is slowing.
Arthur Hayes, Bitmex co-founder and Maelstrom chief investment officer, argues that the AI infrastructure boom resembles a leveraged real estate credit bubble. He compares its financing structure with the 2008 financial crisis rather than the dot-com crash.
Hayes says hyperscalers are building data centers that combine real estate with expensive hardware that can lose value quickly. Newer chips can deliver more computing power while using less electricity, increasing the risk that older equipment becomes obsolete.
In his August 4 essay, “Situationship,” Hayes argues that losses from excessive AI lending could eventually force authorities to inject large amounts of liquidity. He says that liquidity could push Bitcoin above $1 million.
Hayes also argues that AI credit and equity absorbed capital after Bitcoin peaked in October 2025. Under his framework, that shift reduced the marginal liquidity available to support further Bitcoin gains.
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He said Bitcoin could trade between $60,000 and $70,000 for some time, with possible downside toward $50,000. Hayes also cited concerns about potential Bitcoin sales from Strategy as part of the near-term market picture.
Hayes expects data center capital spending growth to slow from mid-2027 and become clearer during 2028. He expects credit expansion to continue during that slowdown, mirroring the 2006–2007 housing pattern in his analysis.
Meanwhile, geopolitical developments remain another source of market uncertainty. Axios reported that Trump had adopted a lower-profile approach toward Iran and favored mounting economic pressure rather than another military offensive.
Weak July jobs data shifted the market toward inflation and consumer spending as the next major signals for Bitcoin. At the same time, Arthur Hayes tied Bitcoin’s longer-term path to an eventual AI credit unwind, arguing that a policy-driven liquidity surge could transform the market outlook.