Crypto Bull Run Hinges on AI Cool-Down and Rate Cuts

GSR's head of markets, Spencer Hallarn, believes that two conditions must be met for a sustained crypto bull run to occur.

The first condition is a cooling down of AI-related capital expenditure. According to Hallarn, big tech firms issuing equity to fund massive AI infrastructure is draining liquidity from crypto markets. This means that capital that could otherwise flow into risk assets, including crypto, is being soaked up by the issuance of equity.

The second condition is a Federal Reserve pivot to rate cuts. Hallarn emphasized that if these conditions occur, liquidity could return and support significantly higher Bitcoin prices. However, he noted that the timing is entirely uncertain and that the Fed's inflation calculus remains data-dependent.