- Bitcoin is set to collapse by another 85%, analyst warns.
- AI disruption fears trigger broad stock market selloff.
The cryptocurrency market “bubble is imploding” with Bitcoin’s price set to tumble another 85% to $10,000, warns Bloomberg Intelligence strategist Mike McGlone.
While traders may talk about a healthy correction, McGlone says the narrative around crypto is changing for a number of reasons.
“The buy-the-dip-mantra since 2008 may be over,” he wrote.
The factors include surging stock markets with low volatility and the industry losing faith in US President Donald Trump’s crypto boosterism. At the same time, gold and silver traders are grabbing profit “at a velocity last matched about half a century ago,” McGlone noted.
To him, this combination signals that more pain is coming for Bitcoin investors.
The warning — far from McGlone’s first — comes as Bitcoin’s price has already crashed nearly 30% in the past month amid a crypto industry downturn that has wiped out $2 trillion in market value.
Investors have dumped $678 million worth of Bitcoin exchange-traded funds so far in February, extending the $6 billion selloff since November, DefiLlama data shows.
To be sure, there are plenty of heavy hitters still bullish on Bitcoin.
On Thursday, US Treasury Secretary Scott Bessent said that the passage of crypto legislation such as the Clarity Act will shore up investors’ confidence and boost prices.
And institutions such as BlackRock and Goldman Sachs continue to up their exposure to Bitcoin and alternative cryptocurrencies like Ethereum.
Market jitters
Technology sector stocks, which Bitcoin price movements closely follow, are also being hammered by growing fears of severe disruption by artificial intelligence technology, now commonly dubbed the “AI scare trade.”
BlackRock’s flagship tech ETF, which tracks industry leaders like Microsoft, Oracle, and Palantir, is down 23% year-to-date.
On February 1, Microsoft, the largest corporate shareholder of OpenAI, saw its value tank by $357 billion in the second-largest selloff for a single trading session in history.
“Technological innovations tend to be disruptive and dynamic,” said Ed Yardeni, president of Yardeni Research. “That’s especially true with AI, which has the potential to disrupt itself.”
Technical obsolescence is moving at “warp speed,” he said.
“That pace has recently spooked investors who’ve been selling the stocks of any company that might be negatively disrupted by AI.”
Crypto market movers
- Bitcoin is down 2.2% over the past 24 hours, trading at $68,717.
- Ethereum is down 4.4% past 24 hours at $1,971.
What we’re reading
Lance Datskoluo is DL News’ Europe-based markets correspondent. Got a tip? Email him at lance@dlnews.com.