Is the AI Boom Keeping Bitcoin from Its Next Bull Run? | Markets Outlook

Shubh Varma expects Bitcoin’s next bull run to follow the AI trade: if finite market capital rotates out of AI and back into crypto, Bitcoin could strengthen. He is uncertain how long the AI trade will last. A rotation could come as early as February, or as late as November if the AI trade is disrupted in 2027. His expectation is that crypto’s prospects may improve when the market’s attention and capital shift, not necessarily because of a near-term change in crypto fundamentals.

At the time of the discussion, Bitcoin was trading around $80,000–$81,000, while aggregate spot and perpetual-futures volumes for major crypto assets had fallen by double digits from September through November. Spot order books were about 20% below historical levels. Perpetual-futures order books, however, remained around usual levels; Varma said that could allow prices to rise quickly if buying returns, even though current trading activity is subdued.

Varma put the perp-to-spot demand ratio at roughly 7–8 to 1 and said a move toward 3 to 1 would be healthier. He characterized current conditions as neutral rather than very bearish. He also monitors ETF inflows and open interest, preferring a slow, steady increase in open interest to a rapid buildup. Together, these indicators inform his view of whether renewed demand is developing in a sustainable way, rather than simply whether prices are moving.

A broad altcoin season has not occurred in the past 1.5–2 years, Varma said. The highest recent count was about 41–43 of the 100 altcoins he tracks outperforming Bitcoin, below the 75 required by one common definition. He does not expect past-style altcoin seasons to return, arguing that crypto now competes for capital with real-world assets, AI-related assets, and a wider range of crypto investments. He also does not expect $1 Dogecoin or $5 XRP. Ray agreed that altcoins may not return in the same way, while noting that tokenization could make yield easier for investors to access.

Varma expects crypto to perform against bearish consensus in 2027, with the second half bullish and possibly the first quarter as well. Ray offered a more cautious timeline: markets could remain soft through late 2026, potentially reach $90,000 before easing, and then strengthen from Q2 through Q4 2027. Varma’s counterpoint was that expected rate hikes and tighter liquidity are already widely known, and that extreme sentiment has sometimes preceded a move in the opposite direction. The discussion leaves the timing uncertain: Varma sees potential for a counter-consensus recovery, while Ray allows for a longer period of weakness first.

Varma also cited Bitcoin and Ethereum’s limited price reaction to a Binance hack involving $6.3 billion, against about $129 billion in Binance customer assets under management. He attributed the resilience to Binance’s capacity to cover losses, the quick reopening of withdrawals, and resting orders that remained largely unchanged. Reimbursements in coin also created demand to rebuy those assets, while Tether and Circle froze 50% of the stolen funds.