Crypto Surges as Tech Stocks Plummet Amid AI Spending Crisis
Bitcoin's price has remained relatively stable near $64K in recent days, despite the Federal Reserve's decision. The cryptocurrency is up 9% this month.
The market seems to have priced in the downturn early and is carrying less leverage than AI stocks. The SEC's backing for the CLARITY Act also adds a structural tailwind to the crypto space.
However, not all tech stocks are faring well. The Mag 7 ETF posted its worst day since April 2025 after Alphabet and Tesla reports. Korea's KOSPI index fell 16% in two days, with back-to-back circuit breakers triggering for the first time in exchange history.
As AI stocks continue to fall, their core problem is now return on spending. Hyperscalers plan to spend around $725 billion on capital expenditures in 2026, but investors are no longer willing to pay for investment without immediate income.