Concerns are mounting that global equity markets may be drifting into another bubble, fueled by relentless optimism about AI. If that bubble cracks in 2026, Bitcoin (BTC) and the broader crypto market could be among the first to feel the fallout.
Key takeaways:
AI bubble risks could hit crypto first, as overstretched, debt-funded equity markets unwind.
Bitcoin may fall to $60,000–$75,000, but institutional support could help limit losses compared to past crashes.
AI bubble can trigger “severe” meltdown in stocks
In November, 45% of fund managers surveyed by Bank of America flagged an “AI bubble” as the market’s biggest tail risk, up from just 11% in September.
More than half of respondents said they believe AI stocks are already trading in bubble territory, thanks to huge spending and poor return on investment.
Companies such as Meta Platforms, Amazon, Microsoft, Alphabet and Oracle have ramped up AI infrastructure spending in 2025.
That spending is expected to surge, with combined capital expenditures, or capex, predicted to rise 64% year-over-year to more than $500 billion by 2026, according to Alexander Joshi, Head of Behavioral Finance at Barclays UK.
“Estimates place AI data centres among the largest infrastructure build-outs in modern history,” he wrote in a November report, adding:
“AI data centres now drive a significant portion of US GDP growth. While not inherently bad, this dependence is risky if AI momentum stalls. If expectations break, the snapback could be severe.”
Financial analyst HedgieMarkets warned that the AI boom risks a far harsher crash than the 2000s dot-com bubble burst, arguing the sector spent roughly $400 billion to generate just $60 billion in revenue in 2025, with most firms seeing no returns.
🦔I think the AI bubble is going to pop, and when it does, it’s going to be uglier than people expect. Forrester predicts a market correction in 2026, and honestly, I think they’re being optimistic. The sector is spending $400 billion while only bringing in $60 billion in…
— Hedgie (@HedgieMarkets) December 15, 2025
Unlike the equity-funded dot-com era, today’s AI expansion is debt-driven, raising the risk of cascading failures across private equity, banks, insurers and already-stressed consumers if growth expectations collapse.
Economic historian Carlota Perez cautioned that an AI and crypto bust could lead to a global economic collapse of “unimaginable proportions.”
How low can Bitcoin go if AI bubble pops in 2026?
Tether CEO Paolo Ardoino warned an AI sector correction could spill over into crypto markets in 2026, calling it the year’s “biggest risk for Bitcoin,” while citing its positive correlation with US equities as the basis for his bearish outlook.
Ardoino added that BTC’s correction will not be as severe as it was during the 2022 (-77%) and 2018 (-84%) bear markets, due to its increasing institutional exposure.
As of December, Bitcoin was down by around 30% from its record high of $106,200.
Related: Bitcoin’s apparent demand shrinks, signals new bear market: Analysts
Analyst Nomad Bullstreet said the Bitcoin price may not decline below its average production cost per coin in the $71,000-$75,000 range, a target area previously suggested by BTC’s prevailing bearish flag pattern.
A report attributed to Fundstrat Global Advisors, as well as Fidelity, projected Bitcoin’s price to hit $60,000–$65,000 in 2026.
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This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision. While we strive to provide accurate and timely information, Cointelegraph does not guarantee the accuracy, completeness, or reliability of any information in this article. This article may contain forward-looking statements that are subject to risks and uncertainties. Cointelegraph will not be liable for any loss or damage arising from your reliance on this information.
