Bitcoin’s future in a world powered by artificial intelligence may depend less on code and more on central banks.
In a new note, Greg Cipollaro, global head of research at financial services and infrastructure firm NYDIG, argued 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 sits at the bottom of those forces, he writes.
If automation cuts jobs and wages, consumer demand could weaken and, in a severe case, falling incomes would put pressure on debt payments and asset prices.
Those fears appear to be justified. This week, Jack Dorsey’s fintech firm Block slashed staff by about 40%, shrinking back to its pre-pandemic size. Dorsey cited AI-enabled efficiency gains for the job cuts, something that was theorized in Citrini’s research on the AI-doom that rocked the market this week.
In such a scenario, policymakers may respond with lower rates or fiscal spending to stabilize the economy. That wave of liquidity could support Bitcoin, which has often tracked changes in the global money supply.
A different outcome would look less favorable for the cryptocurrency. If AI boosts productivity and economic growth without causing major job losses, real yields could rise, and central banks could keep policy tight.
Higher real rates have historically put pressure on Bitcoin by increasing the opportunity cost of holding it and making risk assets less attractive.
change in demand
Concerns about AI echo past moments of upheaval in human society.
The steam engine displaced manual labor in factories and farms. Electrification then rewired entire industries. Later, computers and the Internet automated clerical work and reshaped retail, media, and finance.
Each wave raised the specter of permanent job losses. In the early 1900s, factory mechanization sparked unrest among workers as machines replaced skilled artisans. In the 1980s and 1990s, personal computers reduced the typist pool and back-office staff. More recently, e-commerce helped hollow out brick-and-mortar retail roles.
Still the overall demand did not decrease. Productivity increased. New industries absorbed displaced workers, even though the transition proved uneven and painful. Nowadays, we have industries that were unimaginable before the introduction of the Internet. Think about cloud computing.
Cipollaro argued that AI could follow a similar pattern. As a general-purpose technology, it requires companies to redesign workflows and invest in complementary tools. Over time, that process expands rather than reduces productive capacity.
Cipollaro wrote, “The implication is not that disruption will be painless, but rather that the equilibrium response to new technology has historically been integration, not obsolescence.” “Society’s response to AI will likely follow the same pattern.”
For Bitcoin, that difference matters. If AI ultimately drives long-term growth, the structural backdrop may be different from the short-term shocks that often prompt liquidity injections.
Meanwhile, adoption may also increase due to agent payments, which will essentially see the software paying for other pieces of software without human involvement. One of the early visions of Bitcoin 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 a widespread rollout. Cipollaro said credit cards bundle rewards and short-term credits, features that stable coins don’t match.
Ultimately, while the rise of AI brings new challenges, what matters is the human response to the disruption it brings. If AI triggers a deflationary shock and forces the money printers to turn back on, or if it triggers a productivity boom that raises real yields, Bitcoin will reflect this.