So far this year, Bitcoin and the Nasdaq have been performing quite differently. Tech stocks kept setting records on the back of the AI mania, while the primary cryptocurrency was struggling in a full-blown bear market. The same driving force underpinned both trends: Artificial Intelligence. It directed capital allocation and now appears to be shaping the daily performance of both tech stocks and crypto assets.
Two markets, one split
Bitcoin peaked at around $126,000 in October 2025, but fell sharply in the following months, bottoming just under $58,000 in early July. During the same timeframe, the Nasdaq 100 climbed about 23%.
For most of 2024 and 2025, Bitcoin and the Nasdaq 100 moved in the same direction. From late 2025, they split, and Bitcoin only began to recover in the summer.
The gap widened most in the second quarter of 2026, when Bitcoin plunged about 14%, and the Nasdaq 100 rose about 28%.
Bitcoin fell in three of the last four full quarters. In two of them, the Nasdaq 100 rose.
Where the money went
Bitcoin seemed to lack the catalyst AI enjoyed this year. The sector benefited from new product launches, rising earnings, and massive investment commitments. Amazon, Alphabet, Microsoft, and Meta intend to spend a total of over $700 billion this year, primarily to expand AI infrastructure and chip capacity.
Amazon, Alphabet and Meta have all raised their 2026 plans this year. Microsoft’s lower figure reflects an accounting change, not a spending cut.
At the same time, capital left Bitcoin funds. Spot US Bitcoin ETFs saw about $5.4 billion in net outflows in the first six months of 2026, making it the first half-year period with negative flows since their debut.
Bitcoin ETFs had their worst stretch on record during the same months the AI trade was at its strongest.
Robbie Mitchnick – BlackRock’s head of digital assets – said in June that the AI momentum was “sucking a lot of the oxygen out of the room”, and described Bitcoin’s weakness as part of a wider pattern that also negatively impacted gold and other assets.
Some crypto entities also pivoted toward the AI boom. Bitcoin miners, for instance, control valuable infrastructure, including power connections, land, and cooling systems that AI firms desperately need. One of the major players in that field – TeraWulf – signed a 20-year lease with Anthropic worth around $19 billion, while IREN plans to move most of its sites from mining to AI by the end of 2026.
The break in structure
During the first half of the year, BTC made lower highs and lower lows. July marked the first sign of change as the price climbed 7% while the Nasdaq 100 fell about 7%, with analysts noting that much of the leverage had already been flushed out in June. In September, Bitcoin broke above its May high near $82,800 and pumped to approximately $87,400. This marked a break in structure and the first sign the bear market could be over.
Since then, Bitcoin and tech have started moving together again and last week showed how close that link has become.
Meta’s results on 21 October beat revenue forecasts, but its quarterly capital spending exceeded the cash its operations generated. The next day, the Nasdaq Composite slipped 2.6%, representing its worst day since early June, and chip stocks dropped almost 7%. Bitcoin gave up its gains from earlier in the week and dipped below $80,000 by the weekend, while spot Bitcoin ETFs saw their biggest single-day outflows since June.
One earnings report moved stocks, chips and Bitcoin within 24 hours.
The debate around AI is no longer whether it can generate profits. Instead, investors are focused on the staggering costs of building infrastructure and the ways the spending is funded. When those concerns resurface, investors often cut back on crypto first.
What pulled Bitcoin out of AI’s shadow, and can it last?
Bitcoin’s turn started in the bond market. In mid-August, the US Treasury revealed it would at least double its buybacks of long-term government bonds to support liquidity in that market. Shortly after, BTC jumped about 8%, with more than $1 billion in short positions being liquidated.
Lower long-term yields made government debt less attractive than other riskier assets, which could explain the strong BTC rally. Real demand followed, with strong ETF inflows through late August and September.
Most of those bullish conditions have since disappeared, with the 10-year Treasury rising to its highest level since 2002 in early October and continuing to hover near 5%. The short squeeze wiped out much of the bearish positioning, making a repeat move less likely unless short interest builds again. Adding to the pressure, the CLARITY Act stalled after failing a key Senate vote in September, and spot BTC ETFs have once again slipped into red territory.
On October 22, yields declines as investors rotated out of tech stocks and into government bonds, yet BTC fell alongside the tech sector. What supported the cryptocurrency in August wasn’t risk aversion but government action aimed at stabilizing the bond market.
This moved the focus to a bigger idea that has become quite popular among investors. In The Fourth Turning, published in 1997, William Strauss and Neil Howe argued that history moves in cycles of roughly 80 years, each ending in a crisis era that reshapes institutions. Many investors say we’re in the midst of one now, with government debt at record levels. Ray Dalp makes a similar argument in How Countries Go Broke. He believes that governments burdened by unsustainable debt tend to respond by borrowing even more or printing money, ultimately weakening their currencies. In such an environment, hard assets like Bitcoin may regain a powerful investment story that AI cannot compete with.
Attention is now turning to the next major test for markets, as the Treasury’s expanded buyback program is scheduled to run through November 4, when the department is expected to unveil its updated plans, a week after the Fed’s interest rate decision, and just a day after the US midterm elections.
If authorities keep supporting the bond market and yields ease for the right reasons, the debt story could pull Bitcoin out of AI’s shadow for good. If support scales back and yields push higher while AI spending keeps pulling in capital, Bitcoin could slip back into the shadow of the biggest corporate building program the market has seen in years, trading as a smaller, more volatile piece of the tech trade. Until one path becomes clear, AI is setting the mood for markets, and crypto is following.
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