AI Spending Is Reshaping Bitcoin’s Market Direction as Tech and Crypto Reconnect

Bitcoin’s recent swings suggest that AI investment has become a force shaping crypto markets as well as technology stocks. The relationship hasn’t been steady: Bitcoin fell while the Nasdaq 100 climbed, then began moving in step with tech again. The shift leaves Bitcoin exposed to changes in how investors assess AI spending, liquidity and demand for riskier assets.

A widening gap between Bitcoin and tech stocks

Bitcoin reached roughly $126,000 in October 2025, then fell over the following months to just below $58,000 in early July. Over that same period, the Nasdaq 100 gained about 23%. The split was striking because the two had often moved in the same direction through much of 2024 and 2025.

The divergence was sharpest in the second quarter of 2026: Bitcoin dropped around 14%, while the Nasdaq 100 rose approximately 28%. Bitcoin ended three of the last four full quarters lower; the Nasdaq advanced in two of those periods.

AI drew capital as Bitcoin funds saw outflows

Tech companies had a clear spending and earnings narrative to offer investors. Product launches and rising earnings helped sustain interest in AI, while Amazon, Alphabet, Microsoft and Meta planned to spend more than $700 billion combined during 2026, largely on AI infrastructure and chip capacity.

Bitcoin funds moved in the opposite direction. Spot US Bitcoin ETFs recorded about $5.4 billion in net outflows in the first half of 2026, their first negative half-year since launch.

Robbie Mitchnick, BlackRock’s head of digital assets, said in June that AI momentum was “sucking a lot of the oxygen out of the room.” He described Bitcoin’s weakness as part of a broader pattern that had also weighed on gold and other assets.

The AI buildout is also changing plans among some crypto companies. Bitcoin miners own or control sites with power access, land and cooling systems that can serve data center operators. TeraWulf signed a 20-year lease with Anthropic valued at around $19 billion, while IREN plans to shift most of its sites from mining to AI by the end of 2026.

Bitcoin’s recovery brought the correlation back

Through the first half of 2026, Bitcoin formed lower highs and lower lows. July offered an early change in direction: BTC rose about 7% as the Nasdaq 100 fell roughly 7%. Analysts pointed to the June unwinding of leverage as one factor that may have left the market less vulnerable to forced selling.

In September, Bitcoin moved above its May high near $82,800 and reached approximately $87,400. That break in the price pattern raised the possibility that the bear market had ended. Since then, Bitcoin and technology stocks have started to move together again.

A week of earnings and market moves showed how quickly that link can matter. Meta reported revenue above forecasts on October 21, but its quarterly capital spending exceeded the cash its operations generated. On October 22, the Nasdaq Composite fell 2.6%, its steepest daily drop since early June, and chip stocks lost nearly 7%. Bitcoin gave back its gains from earlier in the week, slipped below $80,000 by the weekend, and spot Bitcoin ETFs recorded their largest single-day outflows since June.

The debate around AI has shifted from whether it can produce profits to the scale and financing of the infrastructure required to build it. When investors question the costs or funding behind that spending, crypto can be among the assets they sell first. That makes Bitcoin’s renewed connection to tech stocks consequential: market sentiment about AI can now flow quickly into crypto prices.

Bond-market liquidity offered a different catalyst

Bitcoin’s summer rebound also had a bond-market trigger. In mid-August, the US Treasury said it would at least double buybacks of long-term government bonds to support liquidity. Bitcoin gained around 8% soon afterward, while more than $1 billion in short positions were liquidated.

Lower long-term yields may have made government debt less appealing relative to riskier assets, helping Bitcoin attract demand. ETF flows turned positive through late August and September. But that support weakened: the 10-year Treasury yield reached its highest level since 2002 in early October and continued hovering near 5%. The August short squeeze had also cleared out much of the bearish positioning, leaving less fuel for a repeat unless short interest builds again. Spot Bitcoin ETFs returned to outflows, while the CLARITY Act stalled after failing a key Senate vote in September.

On October 22, yields declined as investors moved out of tech stocks and into government bonds. Bitcoin fell alongside tech, though. That pairing suggests the August rally was tied less to a broad flight from risk and more to Treasury action intended to stabilize the bond market.

Debt concerns provide another possible source of demand for Bitcoin. In The Fourth Turning, published in 1997, William Strauss and Neil Howe describe history as a series of roughly 80-year cycles, each ending in a crisis that reshapes institutions. Some investors see the current period through that framework, pointing to high government debt. Ray Dalio makes a related case in How Countries Go Broke: governments carrying unsustainable debt may borrow more or create money, weakening currencies over time. If that concern regains force, Bitcoin could draw support from its appeal as a hard asset, independent of the AI investment cycle.

The next test is whether liquidity can outweigh AI spending

Attention is turning to the Treasury’s expanded buyback program, scheduled to run through November 4, when the department is expected to announce updated plans. That date falls a week after the Federal Reserve’s interest rate decision and one day after the US midterm elections.

If Treasury support continues and yields ease, debt and liquidity concerns could give Bitcoin a more independent source of demand. If support fades while yields rise and AI spending keeps drawing capital, Bitcoin may again trade as a smaller, more volatile part of the tech risk trade. For now, the market’s direction depends on which force carries more weight: the funding demands behind AI infrastructure or the liquidity conditions that helped Bitcoin recover.

Trading market shifts with PrimeXBT

AI spending, monetary policy and bond-market liquidity can affect several asset classes at once. PrimeXBT provides access to traditional and crypto markets through its PXTrader 2.0 platform, with more than 350 assets, including Crypto Futures and CFDs tied to forex, indices, commodities, shares and cryptocurrencies.

The platform lists USDT-denominated futures linked to companies including NVIDIA, Alphabet, Apple and Tesla. Crypto Futures maker fees start at 0.01% and taker fees at 0.045%; the stated taker rate falls to 0.015% at VIP 5. PrimeXBT says new clients receive VIP 4 status for their first 14 days, with a 33% reduction in Crypto Futures taker fees during that period. Bitcoin CFD spreads are listed as low as $19 for VIP traders.

PXTrader 2.0 includes TradingView charts with more than 100 technical indicators, adjustable leverage, cross and isolated margin, and hedge and netting modes. Accounts can be funded in USDT, USDC, BTC or ETH, and crypto holdings can be used as collateral for trading traditional markets.

More information is available from PrimeXBT.

About PrimeXBT

PrimeXBT describes itself as a multi-asset broker and crypto asset service provider serving clients in more than 150 countries. Its services include forex, CFDs on indices, commodities, shares and crypto, Crypto Futures, and cryptocurrency buying, storage and exchange. The company offers its PXTrader 2.0 platform and MetaTrader 5, with funding options that include crypto, fiat and local payment methods. PrimeXBT says it has operated since 2018.

PrimeXBT Disclaimer: The content provided here is for informational purposes only and is not intended as personal investment advice and does not constitute a solicitation or invitation to engage in any financial transactions, investments, or related activities. Past performance is not a reliable indicator of future results. The financial products offered by the Company are complex and come with a high risk of losing money rapidly due to leverage. These products may not be suitable for all investors. Before engaging, consider whether you understand how these leveraged products work and whether you can afford the risk of losing your money. The Company does not accept clients from the Restricted Jurisdictions as indicated on its website / T&Cs. Some products and services, including MT5, may not be available in your jurisdiction. The applicable legal entity and its respective products and services depend on the client’s country of residence and the entity with which the client has established a contractual relationship during registration.

Disclaimer: The above article is sponsored content; it’s written by a third party. CryptoPotato doesn’t endorse or assume responsibility for the content, advertising, products, quality, accuracy, or other materials on this page. Nothing in it should be construed as financial advice. Readers are strongly advised to verify the information independently and carefully before engaging with any company or project mentioned and to do their own research. Investing in cryptocurrencies carries a risk of capital loss, and readers are also advised to consult a professional before making any decisions that may or may not be based on the above-sponsored content.

Readers are also advised to read CryptoPotato’s full disclaimer.

The post PrimeXBT: AI is setting the mood for markets, and crypto is following appeared first on CryptoPotato.