Why AI is the New Black Hole for Crypto Investments!

What to know:

By Francisco Rodrigues (All times ET unless indicated otherwise)

Ah, Bitcoin, our beloved digital currency, has once again slipped into a state of disarray, plummeting to $68,500 on Tuesday. It appears the elusive $70,000 mark was just a mirage, as it danced tantalizingly above us over the weekend before vanishing like a magician’s rabbit. Meanwhile, the CoinDesk 20 Index (CD20) saw a dip of 0.23% in the last 24 hours. Just a typical Tuesday in crypto-land.

But fear not! The market seems to be stabilizing after last week’s dramatic tumble to $60,000-a drop that wiped away all gains since that fateful day in November 2024 when Donald Trump was elected president. Who knew cryptocurrencies had such a political agenda?

This little nosedive resulted in a staggering $2.7 billion in liquidations, sending leveraged positions down the drain faster than you can say “margin call.” However, this drastic move may not indicate a lasting change in the crypto landscape. Instead, it could simply be linked to a dwindling liquidity in the financial ecosystem, which is akin to trying to swim in a kiddie pool with a leak.

Raoul Pal, CEO of Global Macro Investor, suggested that last week’s selloff across crypto and tech stocks was like a bad hangover from too much U.S. dollar liquidity-thanks to Treasury operations and government funding dynamics. Who needs tequila shots when you have Treasury bonds, right?

And don’t get me started on artificial intelligence (AI), which has been hogging all the investment capital like a selfish toddler at a candy store. According to Wintermute, money has been flowing into AI tech for months, leaving poor crypto to fend for itself. They even noted that if we removed AI companies from the Nasdaq 100 index, crypto’s negative trends would nearly vanish-poof! Just like my hopes of retiring early.

“The underperformance during rallies and amplified selling during drops is almost entirely explained by AI rotation,” Wintermute OTC trader Jasper De Maere remarked. “For crypto to outperform again, air needs to come out of the AI trade.” So, if we could just convince everyone that AI is overrated, we might be in business.

In other news, Japanese government bond yields are dropping like a hot potato after Prime Minister Sanae Takaichi’s decisive election victory over the weekend. This development could prevent a further unwinding of the yen carry trade, which might have seen up to $5 trillion invested overseas scuttling back home. Talk about a family reunion!

Arthur Hayes, co-founder of crypto exchange BitMEX, pointed out that Takaichi’s win could make the yen less appealing against the dollar, which might actually be good news for risk assets, including our dear cryptocurrencies. That’s like saying eating cake is good for your diet as long as it’s made of gluten-free flour.

Still, prices are expected to remain stuck in a holding pattern for now. The Coinbase Premium Index, which measures the interest from large U.S. investors, is looking quite negative, and daily net inflows for spot bitcoin ETFs came in at a paltry $145 million yesterday. It’s like waiting for the next blockbuster movie only to find out it’s a documentary on paint drying.

“While retail spreads attention across other asset classes, institutional flows through ETFs and derivatives now seem to dictate direction,” Wintermute advised. So, keep your eyes peeled!

What to Watch

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.

Token Events

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.

Conferences

For a more comprehensive list of events this week, see CoinDesk’s “Crypto Week Ahead”.

• Day 1 of 3: Consensus Hong Kong
• Day 1 of 3: Solana Breakout (Online)

Market Movements

• BTC is down 1.9% from 4 p.m. ET Monday at $69,041.32 (24hrs: -0.06%)
• ETH is down 4.94% at $2,016.57 (24hrs: -0.8%)
• CoinDesk 20 is down 2.59% at 3,086.55 (24hrs: +0.43%)
• Ether CESR Composite Staking Rate is up 7 bps at 2.82%
• BTC funding rate is at -0.006% (-6.6247% annualized) on Binance

• DXY is unchanged at 96.83
• Gold futures are unchanged at $5,077.00
• Silver futures are down 0.43% at $81.88
• Nikkei 225 closed up 2.28% at 57,650.54
• Hang Seng closed up 0.58% at 27,183.15
• FTSE is down 0.38% at 10,346.98
• Euro Stoxx 50 is unchanged at 6,060.67
• DJIA closed on Monday unchanged at 50,135.87
• S&P 500 closed up 0.47% at 6,964.82
• Nasdaq Composite closed up 0.90% at 23,238.67
• S&P/TSX Composite closed up 1.7% at 33,023.32
• S&P 40 Latin America closed up 1.97% at 3,767.79
• U.S. 10-Year Treasury rate is down 1.4 bps at 4.184%
• E-mini S&P 500 futures are up 0.09% at 6,989.25
• E-mini Nasdaq-100 futures are unchanged at 25,359.00
• E-mini Dow Jones Industrial Average Index futures are unchanged at 50,260.00

Bitcoin Stats

• BTC Dominance: 59.27% (+0.05%)
• Ether-bitcoin ratio: 0.02921 (-2.66%)
• Hashrate (seven-day moving average): 1,005 EH/s
• Hashprice (spot): $34.72
• Total fees: 2.92 BTC / $204,792
• CME Futures Open Interest: 118,215 BTC
• BTC priced in gold: 13.6 oz.
• BTC vs gold market cap: 4.6%

Technical Analysis

• The ratio of altcoins (excluding Top 10) to BTC weekly chart continues to maintain its core support, suggesting the broader altcoin market did not experience an extreme selloff during bitcoin’s recent slide.
• The weekly RSI has been climbing, indicating some momentum in altcoins relative to BTC.
• There’s no clear breakout at the moment, but it’s worth keeping an eye on.

Crypto Equities

• Coinbase Global (COIN): closed on Monday at $167.25 (+1.29%), -1.44% at $164.84 in pre-market
• Circle Internet (CRCL): closed at $60.10 (+5.36%), -1.31% at $59.31
• Galaxy Digital (GLXY): closed at $21.15 (+7.03%), +0.61% at $21.28
• Bullish (BLSH): closed at $32.05 (+16.76%), unchanged in pre-market
• MARA Holdings (MARA): closed at $8.06 (-2.18%), -1.49% at $7.94
• Riot Platforms (RIOT): closed at $14.97 (+3.60%), -1.27% at $14.78
• Core Scientific (CORZ): closed at $18.55 (+10.35%)
• CleanSpark (CLSK): closed at $10.19 (+1.09%), -1.77% at $10.01
• CoinShares Valkyrie Bitcoin Miners ETF (WGMI): closed at $43.83 (+8.41%)
• Exodus Movement (EXOD): closed at $10.74 (+1.70%)

Crypto Treasury Companies

• Strategy (MSTR): closed at $138.44 (+2.6%), -2.61% at $134.82
• Strive (ASST): closed at $10.15 (-14.86%), +1.03% at $10.25
• SharpLink Gaming (SBET): closed at $7.11 (+1.14%), -0.7% at $7.06
• Upexi (UPXI): closed at $1.05 (-7.89%), +2.86% at $1.08
• Lite Strategy (LITS): closed at $1.05 (-0.94%), -2.86% at $1.02

ETF Flows

Spot BTC ETFs

• Daily net flows: $144.9 million
• Cumulative net flows: $54.82 billion
• Total BTC holdings ~1.27 million

Spot ETH ETFs

• Daily net flows: $57 million
• Cumulative net flows: $11.9 billion
• Total ETH holdings ~5.8 million

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• tag under 100 characters. No tags, no colors, retain images, add humor and sarcasm with emojis. Also, the title shouldn’t be repeated in the body. First, I need to understand Bill Bryson’s style. He’s known for witty, engaging, and slightly irreverent commentary, often with a mix of humor and informative content. I should infuse that into the rewritten text. The original text is about crypto pundits being bullish on Bitcoin despite stagflation fears and Fed rate cut hopes. The title needs to be catchy and clickbait. Let me brainstorm some options. Maybe something like “Bitcoin’s Bull Run: Will Stagflation Spoil the Party? 🚀💸” That’s under 100 characters and includes emojis. It’s catchy and hints at the conflict between bullish crypto and economic concerns. Next, the body. Replace technical jargon with more conversational and humorous language. For example, instead of “sluggish growth,” maybe “economic snoozefest.” Use emojis to add flair.Analyzing the situation… Ensure the structure remains the same, keeping all the images in place. Add some sarcastic remarks, like comparing economic data to a reality TV show or mentioning that experts are “optimistic despite the chaos.” Check for any tags and remove them. Don’t apply any color styles. Make sure the title is only in the tag and not repeated elsewhere. Verify that all images are retained and the HTML structure is correct. Also, ensure the humor and sarcasm are present without being too over the top. Maybe add a joke about the Fed’s rate cuts being a “magic wand” or stagflation being a “ghost story.” Finally, proofread to ensure the character count for the title is under 100 and that the HTML is valid. Make sure the rewritten text flows naturally in Bryson’s style, with a mix of informative content and light-hearted commentary. Done in 8s. Bitcoin’s Bull Run: Will Stagflation Spoil the Party? 🚀💸 What to know: The U.S. economy is playing a game of hot potato with stagflation, mixing stagnant growth and rising prices like a bad reality TV show. Crypto gurus are still bullish on Bitcoin, eyeing Fed rate cuts and a “structural bull run” that makes Wall Street look like a toddler’s scribble. They’ve already picked their favorite altcoins to ride the next crypto rollercoaster. Spoiler: Solana is the golden child. Thursday’s economic data dropped a bombshell: the U.S. might be flirting with stagflation. You know, that 1970s nightmare of stagnant growth, job market limbo, and inflation that makes your coffee cost $50? Yeah, it’s back. But crypto enthusiasts? They’re sipping margaritas on a digital beach, ignoring the storm. 🏖️ Why the optimism? Because the Federal Reserve is expected to play magician, pulling rate cuts out of a hat to keep the market’s heart beating. Meanwhile, the S&P 500 is hitting all-time highs like it’s a TikTok dance challenge, and the dollar index is on a downward spiral faster than my Wi-Fi during a Zoom call. 💀 Shane Molidor of Forgd, a crypto oracle with a side of swagger, told CoinDesk, “Bitcoin’s the new gold-plated piggy bank for people who hate fiat money. It’s not just a gamble-it’s a hedge against your savings being turned into confetti by governments.” August’s inflation report? A 0.4% monthly spike, pushing the annual rate to 2.9%. Meanwhile, unemployment claims hit a four-year high. Oh, and the BLS just admitted they miscalculated jobs data for 2025. Classic! 🤷♂️ Bitcoin briefly hit $116,000-because why not?-while altcoins like Solana (SOL), Chainlink (LINK), and Dogecoin are doing cartwheels. Traders are betting the Fed will cut rates by 25 basis points in September, and who are we to argue? They’ve been cutting rates since the invention of the wheel. 🚀 Le Shi of Auros made a point so obvious it’s almost profound: the “Magnificent 7” stocks are stagflation-proof because they’re spending billions on AI. If you can’t beat the economy, outsource your problems to robots. 🤖 Sam Gaer of Monarq Asset Management summed it up: “Stagflation is a ghost story. The Fed’s magic wand (aka rate cuts) will calm the markets, and crypto will keep climbing like it’s on a sugar high.” Markus Thielen of 10x Research added, “Inflation’s about to take a nosedive. Risk assets? They’re dancing on a tightrope while the Fed waves a green flag. Buckle up for the ride.” Standout tokens Bitcoin’s not the only star in the crypto galaxy. Solana (SOL) is the new kid on the block, with demand so hot it could melt a Bitcoin miner’s GPU. SOLBTC is flirting with the 0.002 level, and investors are throwing money at it like it’s Black Friday in Web3. 🛒 Then there’s Ethena’s ENA token and its synthetic dollar, USDe, which is basically the crypto version of a money tree. And Hyperliquid’s HYPE token? It’s the go-to for young investors who think “high-risk, high-reward” is just a lifestyle. 🎢 Shane Molidor quipped, “Hyperliquid’s for people who want to trade like they’re in a casino, not a library. And Ethena? It’s the crypto equivalent of a free lunch when the Fed cuts rates. Who needs sleep when you’ve got yield?” So, will stagflation crash the party? Probably not. The Fed’s rate cuts are the ultimate party favor, and crypto’s the DJ spinning the tracks. Just don’t forget to bring sunscreen for the bull run. ☀️

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2026-02-10 16:18