GSR: Crypto Bull Run Return Requires Cooling AI Investment and Fed Rate Cuts Spencer Hallarn, Head of Markets at GSR, stated in a recent interview that the current crypto market slowdown is partly driven by capital rotating into AI, as big tech companies issue equity to fund AI

What happened

Spencer Hallarn, head of markets at GSR, said the crypto market slowdown is partly due to investors moving money into AI projects, as big‑tech firms issue new shares to fund AI development.

Confirmed

Global impact / market context

When capital leaves crypto for AI, demand for digital assets falls, potentially lowering prices and slowing new projects. Investors may need to adjust exposure as funds shift between sectors.

Analyst inference

The shift happens while the Federal Reserve is expected to cut rates, which could eventually lift borrowing costs and help crypto, but the current AI funding surge is using cash that might otherwise support a crypto rally. (Rate cuts lower the cost of borrowing; cash means money available for investment.)

Analyst inference

What to watch

1. Big‑tech equity issuances for AI – more share sales could further drain capital from crypto, pressuring prices. Confirmed
2. Federal Reserve rate‑cut timeline – lower rates may revive investor appetite and help crypto recover if AI funding eases. Proposed
3. Crypto investor sentiment surveys – shifts in allocation toward AI versus crypto will indicate whether the slowdown is temporary or longer‑term. Proposed

Evidence

• x.com