AI Drives Markets, Bitcoin Follows Nasdaq After Split Trends

The underlying force driving these divergent paths has been Artificial Intelligence. This technology has directed capital allocation, subsequently shaping the daily performance of both tech stocks and crypto assets.

For much of 2024 and 2025, the two markets moved in tandem, but a split began in late 2025, with Bitcoin only showing recovery in the summer. The divergence intensified in the second quarter of 2026, as Bitcoin dropped roughly 14% while the Nasdaq 100 gained about 28%.

While Bitcoin suffered in three of the last four full quarters, the Nasdaq 100 rose in two of them. The AI sector benefited from new product launches, rising earnings, and significant investment commitments, with Amazon, Alphabet, Microsoft, and Meta collectively planning to spend over $700 billion this year on AI infrastructure.

Meanwhile, capital flowed away from Bitcoin funds; spot US Bitcoin ETFs experienced about $5.4 billion in net outflows across the first six months of 2026, marking negative flows for the first half-year since their debut. Robbie Mitchnick, head of digital assets at BlackRock, commented in June that the AI momentum was "sucking a lot of the oxygen out of the room," noting Bitcoin’s weakness fit a broader trend affecting gold and other assets.

Some crypto entities are adapting to the AI boom. For example, TeraWulf signed a 20-year lease with Anthropic valued at around $19 billion, and IREN intends to shift most of its sites from mining to AI by the end of 2026, leveraging the infrastructure Bitcoin miners control.

A structural shift began in July when BTC climbed 7% while the Nasdaq 100 fell about 7%, leading analysts to suggest much leverage had been flushed out by June. Bitcoin subsequently broke above its May high near $82,800 in September, surging to around $87,400, signaling a possible end to the bear market.

However, the link between tech and crypto has recently tightened. Meta's October 21 earnings beat revenue forecasts, yet its quarterly capital spending surpassed its operational cash generation. The subsequent day, the Nasdaq Composite declined 2.6%, its worst day since early June, and chip stocks fell nearly 7%, causing Bitcoin to shed earlier gains and dip below $80,000 by the weekend.

Bitcoin's recent upturn was fueled by government action, not risk aversion. In mid-August, the US Treasury announced it would at least double its buybacks of long-term government bonds to bolster liquidity; shortly after, BTC jumped about 8% as over $1 billion in short positions were liquidated.

This rally subsided as the 10-year Treasury rose to its highest level since 2002 in early October, and the CLARITY Act stalled after failing a key Senate vote in September, causing spot BTC ETFs to enter negative territory again. On October 22, yields dropped as investors shifted toward government bonds, and BTC fell alongside the tech sector.

Investors are now debating the immense costs of building AI infrastructure. When these funding concerns resurface, capital often retreats from crypto first. The future hinges on the Treasury’s expanded buyback program, set to run until November 4, as authorities decide whether to sustain bond market support or allow yields to rise while corporate AI spending continues to draw capital.

Why it matters

The divergence between tech stocks and crypto highlights how AI is currently directing capital flow across markets. Investors must watch whether the infrastructure spending concerns resurface, as this could prompt crypto to be cut first during market pullbacks.