Investors Abandon Cryptocurrencies for Artificial Intelligence

The stagnation in the price of Bitcoin and cryptocurrencies has led to a migration of liquidity towards artificial intelligence (AI). Spencer Hallarn, head of markets at GSR, stated that attention and capital are shifting towards AI, which is considered the key technology of the moment. This has reduced liquidity in the markets, affecting digital assets. Hallarn explained that trading closely follows the price and market capitalization of an asset; when both indicators are low, trading volume also decreases. Investors are shifting their focus towards fund preservation and diversification, moving away from speculation. In a bear market, clients become more disciplined and focus on long-term planning. Michael Saylor, CEO of Strategy, also mentioned a capital rotation process in the market. However, analysts like Uttam Dey warn about the risk of an AI bubble, where asset prices exceed their historical values. Major tech companies, such as Alphabet, Amazon, Meta, and Microsoft, are increasing their capex budgets by more than 80% to $750 billion this year. The recovery of Bitcoin and other digital assets will depend on macroeconomic changes, such as a potential decrease in AI investment and interest rate cuts by the U.S. Federal Reserve.

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