Spencer Hallarn, head of markets at crypto trading firm GSR, said the current slowdown in crypto prices is partly a function of capital rotating into artificial intelligence rather than a crypto-specific problem. In his view, big technology companies issuing equity to fund AI infrastructure buildouts have been pulling investor capital away from digital assets, and a genuine crypto bull run likely needs that dynamic to cool alongside actual Federal Reserve rate cuts.
The framing positions crypto's recent weakness less as a rejection of the asset class itself and more as a casualty of where marginal investment dollars are currently being deployed across markets.
The Scale of the AI Capital Draw
The pull Hallarn describes is enormous in scale. The top five U.S. hyperscalers alone have accumulated $662 billion in future data center lease commitments that haven't even begun and sit entirely off their balance sheets, according to a Moody's Ratings analysis reported by Fortune. Goldman Sachs separately projects total hyperscaler capital expenditure from 2025 through 2027 will reach $1.15 trillion, more than double the $477 billion spent over the prior three years. That level of committed capital represents one of the largest sustained capital-expenditure cycles in corporate history, and it has coincided with a period in which crypto has struggled to sustain rallies even on days when broader risk sentiment has been constructive.
Why Rate Cuts Alone May Not Be Enough
Hallarn's comments imply a more complicated setup than the simple "rate cuts equal crypto rally" narrative that has dominated market commentary this year. Even with the Federal Reserve's September meeting priced at nearly 90% odds for a 25-basis-point cut, easier monetary policy may do less for crypto specifically if capital keeps flowing preferentially into AI-linked equities rather than broadening out into risk assets generally — a dynamic already visible in how bitcoin lagged smaller tokens even as Asian equities and oil rallied earlier this week. That distinction matters for anyone positioning around the Fed's easing cycle expecting an automatic crypto tailwind.
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What Would Need to Change
For Hallarn's thesis to play out, either AI capital expenditure growth would need to visibly decelerate, or crypto would need to attract fresh capital independent of the AI trade entirely — something that has proven difficult so far in 2026. Until one of those shifts happens, GSR's read suggests crypto may continue trading as a secondary beneficiary of risk appetite rather than a primary destination for it, even as the macro backdrop nominally turns more favorable.
