AI Doomsday: Why 1 Crashing Crypto Could Be a Once-in-a-Decade Buying Opportunity

On Feb. 22, Citrini Research dropped a piece titled “The 2028 Global Intelligence Crisis” that rattled investor confidence in the market and economy. It highlights the possible negative results if artificial intelligence (AI) rapidly progresses.

Just days after the report, fintech powerhouse Block added to the worries when it announced layoffs of 40% to its staff.

Since the research memo was released, the S&P 500 index is down more than 4% (as of March 19). Financial stocks tied to spending activity, like American Express and Capital One, are off by double digits.

The turmoil and uncertainty point to this crashing cryptocurrency being a once-in-a-decade buying opportunity.

Image source: Getty Images.

Counting on the government to step in and provide support

The main takeaway from the Citrini report is that AI productivity enhancements will lead to a wave of corporate layoffs, particularly for white-collar workers. This will result in a drastic reduction to incomes earned and spending power, which will reduce demand across the economy. In this scenario, unemployment soars and wages tank.

Despite how scary this sounds, people can count on the government to step in and provide support. This would actually introduce a powerful tailwind for a scarce asset like Bitcoin, which is 44% off its peak. Cutting interest rates, and keeping them near zero, and printing money are the tools. Plus, a wave of regulations could be introduced to protect workers in various industries.

Providing support is exactly what the U.S. did on two separate occasions in the past couple of decades. During the time of the Great Recession, the government injected trillions of dollars of stimulus into the economy through different programs. Then, during the COVID-19 pandemic in 2020, the government stepped in again, only this time with more firepower and at a faster pace.

Bitcoin, which was created and launched on the heels of the Great Recession, is up 9,000,000% in 15 years. It has been a direct beneficiary of the government’s reckless fiscal and monetary policies.

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CRYPTO: BTC

Bitcoin

Today’s Change

(0.53%) $379.18

Current Price

$71306.00

Key Data Points

Market Cap

$1.4T

Day’s Range

$68970.00 - $71438.00

52wk Range

$60255.56 - $126079.89

Volume

41B

Ignoring these fears, this asset still has a promising future

Any headlines hinting at possible AI-induced doomsday scenarios get a lot of attention these days. I don’t believe there’s a reason to worry, though.

Integrating AI throughout the economy will take time. It’s not going to happen overnight. Plus, not everything can or will be automated. What’s more, new jobs will be created, as has been the case throughout history.

These AI fears are overblown, in my opinion. But Bitcoin still has significant long-term upside, based on the same argument about fiscal and monetary policies providing a persistent liquidity boom. Even when the economy isn’t facing a severe recession or generational health crisis, sovereign debt and money supply levels keep rising.

That alarming trend is not going to end. And it supports the case for Bitcoin being a once-in-a-decade buying opportunity right now.