Analysts Warn: Bitcoin Could Crash If AI Bubble Bursts in 2026

What happens when two of the biggest tech narratives of the decade collide? Analysts are sketching a scenario where a popping AI bubble in 2026 sends shockwaves straight into Bitcoin's core.

The Interconnected Tech Storm

The warning isn't about AI directly attacking crypto code. It's about capital—vast rivers of speculative money that have flowed into both sectors. The theory goes that a sudden loss of faith in artificial intelligence startups and their eye-watering valuations would trigger a broad risk-off panic. Digital assets, sitting on the speculative end of the investment spectrum, often get sold first when investors flee to safety.

Bitcoin's Double-Edged Narrative

Bitcoin has long pitched itself as 'digital gold'—a hedge against traditional market folly. But its price action still dances, often uncomfortably, to the tune of broader tech sentiment. A severe correction in AI could test that decoupling story to its limit, forcing a brutal reassessment of what's truly a safe haven and what's just another high-beta tech bet wearing a philosophical disguise.

The 2026 Countdown

Why 2026? Analysts point to projected timelines for major AI milestones and profitability cliffs. If promised revolutions in automation and intelligence fail to materialize into sustainable revenue by then, the 'story stock' premium evaporates. The resulting wealth destruction wouldn't discriminate—it would wash over all risk assets. After all, nothing unifies a market like a margin call.

A crash in one overhyped sector tanking another? On Wall Street, they call that diversification—or as the cynics say, putting all your eggs in different baskets, but on the same sinking ship.

TLDR

• Analysts predict Bitcoin could fall to $60,000-$75,000 if AI bubble bursts.
• Institutional support may cushion Bitcoin’s fall compared to past crashes.
• Bitcoin’s price may find support at $71,000-$75,000, its production cost.
• 45% of fund managers consider the AI bubble the biggest market risk.

Concerns are rising that the global equity markets could be heading toward another bubble, this time driven by artificial intelligence (AI). As excitement around AI continues to grow, there is increasing speculation that a correction in the AI sector could cause a ripple effect, impacting Bitcoin (BTC) and the broader crypto market. In 2026, experts are warning that an AI bubble burst could lead to a sharp decline in Bitcoin’s price, though some institutional support could limit the losses.

AI Bubble Risk and the Growing Concerns

The HYPE surrounding AI has led to what some are calling an AI-driven bubble. According to a recent Bank of America survey, 45% of fund managers flagged this as the biggest tail risk for the markets. Over half of these managers believe AI stocks are already in bubble territory, thanks to the combination of high investment and low returns.

Experts point to the fact that many companies, such as Meta Platforms, Microsoft, and Amazon, are investing heavily in AI infrastructure, with spending expected to surge in 2025. This increased capital expenditure is contributing to the rapid growth of AI data centers, which, while not inherently bad, are seen as risky if AI momentum were to stall. As Alexander Joshi from Barclays UK noted, these AI data centers are driving a significant portion of U.S. GDP growth but could face a severe snapback if the market expectations fall short.

Bitcoin’s Vulnerability Amid AI Bubble Burst

Tether CEO Paolo Ardoino has raised concerns about the potential spillover effects of an AI sector correction on the crypto markets. In particular, bitcoin may be one of the first to be affected if the AI bubble bursts in 2026. Ardoino cited Bitcoin’s positive correlation with U.S. equities as the basis for his bearish outlook on the digital asset.

Despite Bitcoin’s growing institutional support, analysts warn that BTC’s price could fall to the $60,000-$75,000 range if the AI bubble pops. While institutional backing may help mitigate losses compared to previous crashes, the broader economic fallout from an AI-driven market correction could still weigh heavily on Bitcoin’s value.

Analysts, such as Nomad Bullstreet, suggest that Bitcoin’s price may not drop below its average production cost, which is estimated to be around $71,000-$75,000. This range is seen as a key support level for BTC, given the high cost of mining and production in the current market environment.

How Institutional Support Could Help Bitcoin

Bitcoin’s institutional exposure is increasingly seen as a stabilizing factor in the event of a market downturn. During past bear markets, such as the crashes in 2022 and 2018, Bitcoin experienced significant declines, with losses of around 77% and 84%, respectively. However, this time, the presence of institutional investors is expected to offer some level of protection for Bitcoin.

The growing institutional interest in Bitcoin and other cryptocurrencies is believed to provide a cushion against the extreme volatility seen in previous market cycles. As institutions continue to allocate capital into Bitcoin, this support could help stabilize the market if the AI bubble bursts in 2026. Nevertheless, the potential risks of an AI-driven market correction remain significant and could lead to further volatility in the crypto space.