Is the AI boom good or bad for crypto?
There’s never a dull moment onchain. Here’s what you need to know this week:
Is the AI boom good or bad for crypto? Ray Dalio calls AI a "classic bubble" but Eric Trump says it could be crypto's biggest catalyst. Who's right?
Anthropic could go public next month at a $2 trillion valuation. What would the biggest IPO in history mean for crypto and AI stocks?
Is "Uptober" actually real? BTC closes green in October 77% of the time — but not last year. Here's what the data says about Q4.
MARKET BYTES
Markets dip, rate-hike fears linger, and ETH's biggest buyer is about to stop
Earlier this week, traders were celebrating as the S&P 500 hit a new all-time high for the first time since August and bitcoin climbed to just below $87,000. But in a pattern we’ve seen over and over again this year, elevated oil prices connected to the Iran conflict raised fears that the Fed will continue to raise interest rates — causing both crypto and stocks to dip.
As crypto prices fell, around $969 million in leveraged positions were liquidated in a 24-hour period. By Thursday morning, BTC slipped below $82,000 for the first time in a few weeks before recovering slightly.
Traders generally anticipate that the Federal Reserve will raise interest rates again this year, but notes from last month’s Fed meeting — which revealed that all 19 Federal Reserve officials concurred on the first rate increase in three years — gave no sign of when that might happen.
And recent comments by Fed officials show that they aren't exactly in a rush. “Fed Vice Chair Philip Jefferson and New York Fed President John Williams said in separate speeches last week they believed the central bank has time to assess the economy before considering another rate increase,” Bloomberg reports. “Investors promptly reeled in their expectations for a rate hike this month.”
What’s happening at the biggest crypto conference of the year?
This week, around 25,000 members of the crypto industry are gathered in Singapore for the Token2049 conference — the biggest crypto conference of the year.
Speakers include Hyperliquid Chief Executive Officer Jeff Yan, Polymarket CEO Shayne Coplan, World Liberty Financial co-founder Eric Trump, BitMine Immersion Technology CEO Tom Lee, Coinbase Institutional head Liz Martin, and Ethereum co-founder Joseph Lubin.
One of the big stories of the conference was the connection between crypto markets and the rise of artificial intelligence. Some analysts have suggested that the vast investment being deployed into AI leaves less capital for crypto, but speaking on the first day Eric Trump argued that AI agents using crypto would result in both markets growing in the future.
“The thing that’s going to spawn the growth of digital assets by far the quickest is actually the AI trade,” he said. “The faster our, kind of, friends on the other side of the aisle in AI can sprint toward their goal, the better this industry is going to do.”
Timing the market… Speaking at another event in Singapore, legendary investor Ray Dalio warned that the AI boom is a “classic bubble” that is close to popping as interest rates rise: “We’re in the part of the cycle that is before that but approaching that.” Mike Novogratz, another billionaire investor, had a different take: AI might be the “biggest bubble of our lifetime,” he said, but it still has a long way to grow.
Ethereum accumulation giant BitMine will stop buying later this year
Also speaking at Token2049, BitMine CEO Tom Lee said that the Ethereum accumulation giant is fast approaching its goal of owning 5% of the circulating supply of ETH — and that the firm will stop buying at that point.
Lee said his firm is about 100,000 ETH short of its goal, which it will reach in six or seven weeks. “We thought this would take five years,” he said. “It took us a little over a year. More importantly, we did this all in the middle of a bear market. Now we’re going to stop.”
Pressure drop… Following the news that ETH’s biggest and most reliable source of recent demand would soon stop buying, the second-biggest cryptocurrency by market cap dropped about 5%.
UPTOBERFEST
From the Fed to Anthropic’s IPO: 3 questions for investors as we head into Q4
September is traditionally a slow month for markets, but last month was an exception. And now that we’re into October — traditionally considered crypto’s most bullish month of the year — traders are hoping for an “Uptober” to remember.
From the biggest IPO in history potentially happening as soon as next month to swirling questions about the Fed’s next move, here are three major questions facing investors in the last quarter of 2026.
How could the Fed’s next meeting impact crypto markets?
After the Fed’s first rate hike in three years last month, the central bank hinted that another hike was likely this year. And in the weeks since, investors have been watching for signs from the central bank as to when that might come.
As recently as Sept. 29, prediction markets assigned a 70% probability of the Fed hiking rates at their upcoming Oct. 28 meeting. But after weak jobs data released last Friday showed the U.S. added just 29,000 instead of the projected 90,000, those odds sharply fell — to around 16% as of Thursday morning.
If the Fed holds off on hiking rates until December, analysts say that could be a boon for assets like crypto and stocks in the meantime.
When the jobs data was released last week, BTC rose around 3% before giving back some of its gains over the weekend. Dan Khus, chief analyst at LVRG Research, said that crypto took the jobs data “as a relief signal” and showcased investors’ willingness to buy into risk assets.
Still, inflation – not jobs – will primarily drive the Fed’s next rate decisions. And if price increases remain sticky, the potential remains for further rate hikes which could put pressure on risk assets like crypto.
What could the Anthropic IPO mean for the stock market?
The AI giant Anthropic is proceeding with plans to go public as soon as next month. The offering, which many analysts believe will be the biggest in the history of markets, could raise $100 billion in cash for the company, and value Anthropic at more than $2 trillion.
But it comes at a time when other companies, including rival OpenAI, fitness tech company Oura, and the energy firm Holtec Nuclear, have delayed their IPOs — citing AI safety concerns and market sentiment. Some investors also question whether Anthropic’s valuation is reasonable, given its $8 billion loss last year, and upcoming financial commitments worth more than $500 billion over the next decade.
Still, many analysts believe that Anthropic’s growth potential outweighs its hefty valuation, and to some, the future spending commitments actually signal that the “AI trade” that’s carried the stock market in recent years still has legs.
“This is positive for the AI trade,” said Kathleen Brooks, Research Director at XTB Platform. “The fact that Anthropic is planning on spending big on capex means that the capex cycle is not over yet. This is good news for semiconductor and AI infrastructure companies. I believe that if Anthropic had signalled a lower level of spending, this could have caused a wobble in the AI trade, since it would lead to fears about the sustainability of the AI trade as we move into Q4.”
It's “Uptober” again — but is it actually a real phenomenon?
“Uptober” is many crypto traders’ favorite month of the year. Not only is it the spookiest month, but it’s also the month that’s offered the best historic returns for BTC since 2013, which has closed the month in the green 77% of the time and averaged a nearly 20% monthly gain in that span.
Last October, however, wasn’t one of those months. While BTC did hit its all-time high of around $126,000 early last October, crypto markets saw their biggest liquidation event ever on Oct. 10 and BTC closed the month in the red for only the third time since 2013.
This year, after a brief push toward $87,000 to start the month, bitcoin is down around 3% so far. But many market watchers believe October has upside left, especially as institutional investors continue to pour capital into ETFs and regulatory agencies clarify rules for the industry.
“There is a welter of money sitting on the sidelines waiting for more positive figures,” said Stephen Wundke of Algoz. “If we get those softer [inflation] figures and no rate rise, BTC will move very quickly and drag the rest of the quality assets with it.”
But is Uptober actually a real phenomenon? A report last year from Coinbase Institutional found that BTC has a consistent 55-57% chance of a “green” month in any given period, indicating that monthly seasonality might not be the most useful trading signal for the asset.
NUMBERS
$21 billion
The increase in value of Strategy’s bitcoin holdings in Q3, returning the firm to profitability for the first time in a year. Strategy also reported purchasing $28.7 million in BTC last week, bringing total holdings to 848,000 BTC worth around $73 billion.
$1 billion
Value of Grayscale’s Zcash ETF after its first month of trading. "As measured by assets gathered in the first month of its existence as an ETF, the Zcash ETF is in the top 1% of ETFs launched in the past decade," said one Grayscale exec at Token2049.
TOKEN TRIVIA
What is mining?
A
A proof-of-stake consensus mechanism
B
The process Bitcoin uses to generate new coins and verify transactions
C
The process Ethereum uses to generate new coins and verify transactions
D
All of the above
Find the answer below.
Trivia Answer
B
The process Bitcoin uses to generate new coins and verify transactions
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