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The AI Trade Is Turning Sour — The Bitcoin Rotation BEGINS | Scott Melker and Jeff Booth
In an interview, Scott Melker and Jeff Booth said the AI trade is expanding but heading toward a bubble pop. Booth argued that because AI's marginal cost is zero, the capital spending on AI can never be repaid, and Bitcoin is the only place to be, with a rotation already beginning.
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What happened
In an interview, Scott Melker and Jeff Booth said the AI trade is expanding but heading toward a bubble pop. Booth argued that because AI's marginal cost is zero, the capital spending on AI can never be repaid, and Bitcoin is the only place to be, with a rotation already beginning.
Confirmed
Global impact / market context
If AI capital spending cannot be paid back, companies that borrowed heavily for AI may face losses, hurting their stock prices. Investors might then sell those stocks and buy Bitcoin, pushing its price up. This could shift money from tech to cryptocurrency.
Analyst inference
The AI trade has been a major driver of stock market gains. A bubble pop could cause a broad sell-off in technology stocks, while Bitcoin, seen as an alternative, might benefit from the rotation. This could change investor positioning across both markets.
Analyst inference
What to watch
- Monitor whether the AI trade continues to expand or shows signs of a bubble, as Booth predicts a spectacular pop. This is based on their statements, so watch for such signals. Confirmed
- Watch if investors actually rotate into Bitcoin as the AI trade sours. The interview suggests this rotation has begun, but you should look for trading volumes and price moves to confirm the trend. Proposed
- Track capital spending by major AI companies. If they keep spending heavily despite zero marginal cost of code, it may increase the risk of a bubble, potentially affecting both AI stocks and Bitcoin's price. Analyst inference
Affected assets
- BTC — Bitcoin