Bitcoin Fell Just 2% As AI Stocks Lost $1 TRILLION - What's Holding It Up? | Brent Donnelly

Bitcoin fell roughly 2% while AI stocks lost $1 trillion, prompting a debate over what is supporting Bitcoin and whether its relative resilience will last. One explanation is that Bitcoin acts like an option on its own adoption: adoption statistics had risen over the prior couple of months, potentially building support under the price. Its fixed supply distinguishes it from dollars, while stablecoins retain dollar value without sharing that scarcity. But the speakers did not treat adoption as a settled explanation, and noted that Bitcoin’s value as a store of wealth depends on local conditions and that its technology must keep improving.

Brent Donnelly stressed that Bitcoin’s current advance has been modest relative to earlier cycles: the 2022–25 rally was about fivefold, versus roughly twentyfold in each of the two prior rallies, and the move from $69,000 to $126,000 was less than twofold peak to peak. Its 50-week moving average was still pointing slightly down, although Bitcoin had remained above it since breaking through and other meaningful moving averages were rising. Mike argued that bulls were underestimating Fed-policy and broader-market risks, and that the 2025 rally was shallower than previous ones. Still, if other markets pulled back, he saw a potentially exceptional Bitcoin trade, while acknowledging he could be wrong.

The speakers disagreed over how damaging higher interest rates are to risk assets. Donnelly questioned whether rates near 5% are inherently toxic, noting that rates were more than 100 basis points higher during the internet bubble and markets did not crack until several hikes into that cycle. Anna Wong said her team expected no Fed hikes for the rest of the year, despite market pricing, and forecast core PCE inflation of 3.2% year over year. She said the rise in long-term yields so far this year was equivalent to about 150 basis points of short-rate hikes, raising borrowing costs and potentially tightening financial conditions as the economic outlook becomes less steady.

AI spending is both a support and a vulnerability in that outlook. Donnelly said capital flowing into AI is drawing borrowing and issuance toward the sector, lifting yields and making financing harder for other industries, including housing. AI investment also supports employment and asset prices, but its broader economic flywheel depends on revenue. The discussion put the gap between current spending and possible payback at roughly two years, leaving open whether revenues will justify the outlays before funding dries up. Speakers questioned whether OpenAI could meet $1 trillion in commitments and raised a similar spending-versus-revenue concern about Anthropic. Wong noted that a strong backlog remains supportive, while political opposition to data centers could lead to cancellations around the midterms.

Bitcoin’s resilience is not a guarantee against a wider selloff. Mike said crypto and metals could be vulnerable if stocks fell and financial conditions tightened; he also warned that a Nasdaq break below a key level could accelerate algorithmic selling. He saw a series of 50-basis-point Fed cuts as possible if markets weakened. Donnelly, meanwhile, said tech-related inflows are an important support for the dollar, so a reversal in the AI-capex story could weigh heavily on it. He likened the current “no alternative” narrative around US assets to 1999–2000, but said the dollar is more vulnerable now because the US has smaller global shares of manufacturing, reserves and exports than it did then.

The discussion also questioned how institutional adoption and politics may change Bitcoin’s appeal. Speakers said Bitcoin is increasingly held through trusted custodians, while self-custody remains useful in some countries; they disagreed on whether Wall Street’s involvement has permanently weakened crypto’s association with decentralization and liberty. Early holders may be selling from disillusionment or simply diversifying after large gains. One speaker expected a Democratic midterm win to bring pushback against crypto because of its association with Trump, as well as against data centers and AI; another argued that an election result in line with polls could mean more spending, with both parties seeking to improve wage earners’ lives. Donnelly also cautioned that weekend price gaps can form in thin markets and later retrace as sellers return, making weekend trading volatile and Bitcoin a less dependable standalone signal of equity liquidity as more markets trade around the clock.