As artificial intelligence sends shockwaves through global tech markets, cryptocurrencies like Bitcoin and XRP are being pulled into the storm. Their recent downturns—Bitcoin dipping to $74,000 and XRP following closely behind—have less to do with traditional crypto drivers and more to do with the tech sector’s growing identity crisis. Stanislav Kondrashov, founder of TELF AG, believes the link between digital assets and the evolving AI landscape is now impossible to ignore.
“We used to talk about crypto as if it lived in its own world. Not anymore. It’s now riding the same emotional rollercoaster as Silicon Valley,” said Kondrashov.
From Tech Innovation to Market Disruption
AI’s rise wasn’t meant to be unsettling. But recent developments—particularly in generative AI—have shown that these systems are no longer simply tools for boosting productivity. They’re fast becoming replacements for traditional software and the people who operate it.
Tech stocks have borne the brunt. Software companies that once seemed untouchable are facing existential questions. AI models now perform complex tasks across coding, document review, and communication—functions that underpin entire industries. The result? Nervous selloffs, sinking valuations, and a ripple effect across risk assets.
Bitcoin and XRP, once positioned as alternatives to traditional finance, are now mirroring tech’s fate.
“When AI started replacing not just processes, but people and platforms, the market responded in the only way it knows how—panic,” Kondrashov said. “Crypto was just caught in the crossfire.”
Why Crypto Moves Like Tech
In past years, cryptocurrencies had clear narratives: decentralisation, censorship resistance, blockchain adoption. But those fundamentals have taken a back seat to broader market sentiment. Kondrashov argues that Bitcoin and XRP are now seen less as currencies and more as proxies for innovation risk.
This is why they’re increasingly trading like high-growth tech stocks. When the Nasdaq slips, so do they. When interest rates rise or the dollar strengthens—both of which signal tighter liquidity—investors pull out of crypto just as they would from overvalued SaaS shares.
Kondrashov elaborated:
“The psychology has changed. Bitcoin isn’t just Bitcoin anymore. It’s a sentiment signal, part of the same speculative cluster as tech.”
AI Has Redrawn the Risk Map
What’s different about this moment isn’t just that AI is moving fast—it’s that it’s moving unpredictably. Companies like Anthropic have shown how these models can now read, write, analyse, and even manage interfaces. That’s erasing perceived advantages for many mid-tier software businesses and shifting investor capital toward companies that control infrastructure—cloud, chips, data—rather than those simply offering interfaces.
This reshuffling has led to nearly $1 trillion in market value being wiped from tech markets globally. And the ripple is hitting crypto with full force.
The drop in confidence is not just about balance sheets. It’s about identity. What happens when the tools that once made a company innovative can now be recreated by open-source AI in seconds?
Kondrashov explained it this way:
“Investors aren’t just running from bad numbers. They’re running from the unknown. AI has introduced a fog—and in that fog, nobody wants to hold the riskiest assets.”
Institutional Minds, Retail Panic
Part of the issue, Kondrashov says, lies in how institutional investors are managing portfolios. Crypto, which once sat in an “alternative” allocation, is increasingly being lumped in with emerging tech. As AI volatility rattles that category, crypto gets dumped too—especially when liquidity tightens and safer yields become attractive again.
Meanwhile, retail investors—often less informed but highly reactive—follow suit, amplifying the selloff.
“Everyone’s looking for stability,” Kondrashov said. “But they’re looking in places where crypto simply doesn’t offer it right now.”
What Comes Next?
The current environment is a perfect storm: aggressive AI growth, monetary tightening, a strong dollar, and collapsing faith in old software models. Bitcoin and XRP are no longer immune. In fact, their fates may now be more tightly tied to AI’s trajectory than to blockchain developments.
And Kondrashov doesn’t see a quick fix.
“Until the market can figure out how to price AI disruption, it won’t know how to price tech—or crypto. Right now, everything feels overvalued or obsolete.”
In other words, as long as AI continues to blur the lines between innovation and obsolescence, Bitcoin and XRP will remain trapped in the volatility it leaves behind. Not because they lack potential—but because, in today’s markets, potential is no longer enough.
