Hardcore bitcoin purists have not lost faith in the world’s largest digital currency, even though it lost nearly 17% of its value, marking the worst weekly performance since July 2024 and wiping out around $200 billion in market capitalization in the past seven days.
Prominent bitcoin advocates or maximalists (short for maxis), a group that believes bitcoin is the only cryptocurrency likely to achieve lasting global adoption and monetary relevance, argue that capital is being sucked out of cryptocurrencies and into artificial intelligence, creating what they see as a temporary liquidity crisis rather than bitcoin’s fundamental problem.
This narrative comes as the world’s largest cryptocurrency currently sits below $60,000, down about 27% from last month and more than 50% from its all-time high on October 6, according to data from CoinDesk.
The capital flight coincided with a record run for US spot bitcoin ETFs, which suffered outflows of $3.45 billion in 11 consecutive sessions. As cryptocurrencies bleed, Wall Street’s tech appetite remains aggressive. Even after the recent pullback, AI-related stocks remain among the market’s best performers. The Nasdaq is up 34% and the S&P 500 is up nearly 24% in the past year, causing anxiety among crypto investors seeking answers about bitcoin’s underperformance.
While some market observers see the drop as a structural loss of confidence, bitcoin maxis argue that the drop is simply a reflection of the strong rotation of speculative capital toward AI.
According to Mati Greenspan, market analyst, bitcoin maximalist and founder of Quantum Economics, the price of bitcoin is on a downward trend, not because investors have lost faith in it, but because AI has become the dominant destination for speculative capital.
“Bitcoin is not facing a bitcoin problem. It is facing a liquidity problem,” Greenspan told CoinDesk in an interview on Friday. “AI has become the market’s new obsession, but obsessions fade.”
Another prominent bitcoin maxi and topic of recent debate over whether his bitcoin selling has caused the recent drop, Strategy (MSTR) president Michael Saylor echoed Greenspan’s sentiment on X.
“Capital markets are funding AI development on a historic scale: ~$400 billion in six months,” Saylor said. Bitcoin ETFs have seen ~$4 billion in outflows since May 14, putting pressure on BTC. This is a capital turnover, not a deterioration of Bitcoin. “Volatility creates opportunities.”
‘The root cause’
Greenspan pointed to Anthropic’s $50 billion initial public offering, which targeted a valuation of nearly $1 trillion, as the clearest indication of where market liquidity might have gone.
While bitcoin advocates point to the asset’s long-term historical returns, traditional liquidity funds are currently pursuing artificial intelligence infrastructure, data centers and multibillion-dollar private equity rounds, Greenspan added.
Indeed, the anticipated IPOs of OpenAI, Anthropic and SpaceX, which together could raise more than $200 billion, may be drawing investor attention and capital to AI and technology opportunities at the expense of other speculative assets, including cryptocurrencies.
Jameson Lopp, core Bitcoin developer and maximalist, argued that investor frustration during market crises often fuels the search for simple explanations. “I suspect the root cause is the bear market, combined with TradFi markets experiencing an AI boom,” Lopp said on X.
However, not everyone blames AI as the main driver of Bitcoin’s weakness.
Market data suggests the pressure on cryptocurrencies is multifaceted, with critics arguing that blaming AI oversimplifies a fragile macroeconomic environment. Jason Fernandes, a bitcoin maxi, market analyst and co-founder of AdLunam, told CoinDesk that the asset is facing pressure from multiple fronts.
“BTC is under siege from all angles right now,” Fernandes said. “ETF outflows, high interest rates, creeping inflation, money flowing back into hot tech stocks, macroeconomic uncertainty and now the psychological impact of Michael Saylor’s strategy of selling BTC after years of preaching ‘never sell’.”
Strategy, the largest publicly traded bitcoin holding company, drew heavy criticism on social media after selling 32 bitcoins for $2.5 million in late May (its first sale in four years) to fund dividend payments from STRC, its perpetual preferred stock known as Stretch.
Although critics claimed the move “damaged confidence,” Greenspan, like many other analysts, dismissed panic. “Selling 32 BTC with a balance of over 843,000 BTC is not even a rounding error,” Greenspan said.
Is it time to buy?
Despite the exits, some of the maxis argue that it could be time to dip into the underperforming asset, as bitcoin’s long-term fundamentals remain intact.
Greenspan argued that the recent record outflows of bitcoin funds are likely part of a rotation into monetary assets. He added that bitcoin’s current consolidation phase could serve as an accumulation zone if the network’s underlying fundamentals hold up. Despite the price decline, institutional adoption, regulatory frameworks, and discussions around bitcoin as a strategic reserve asset have continued to mature in recent years.
Meanwhile, other bitcoin advocates, such as Strike CEO Jack Mallers, are sidestepping broader market debates and encouraging investors to buy the dip on social media.
However, a return to cryptocurrencies is not guaranteed to be smooth. Even if bitcoin’s weakness is partly due to the flow of capital into AI, Greenspan maintains that a reversal may not immediately benefit cryptocurrencies and could act as a double whammy.
“If AI sentiment breaks down, bitcoin could be hit twice: first by liquidity leaving cryptocurrencies, and then again by broader risk aversion across markets,” Greenspan said.
“As for what comes next, I would be careful assuming the bottom has already been hit,” Greenspan said.
Read More: Bitcoin Isn’t Crashing Because of Saylor, It’s Losing Trading Momentum
