Is AI eating crypto’s liquidity? Inside the $300B Oracle hit and Bitcoin miner pivots

Oracle did what each legacy tech big goals of. In September, it introduced a $300 billion cloud deal wrapped round OpenAI, the hottest title in software program, and watched its inventory rip increased.

Two months later, the market gave its verdict. Oracle has shed greater than $300 billion in market worth, buying and selling under its pre-AI announcement ranges, whereas studies started calling it a “ChatGPT curse.”

Analysts are actually treating the mega deal as a case examine in what occurs when AI guarantees outrun the money flows which can be imagined to help them.

At the identical time, Cursor simply raised $2.3 billion at a $29.3 billion valuation. The firm crossed $1 billion in annualized income this yr and greater than tripled its valuation since June.

The coding device vacuumed up enterprise capital on the promise that engineers would dwell inside an AI pair programmer that will write most of the code for them.

A personal devtool startup and a public software program incumbent are abruptly a part of the identical psychological spreadsheet as most L1 tokens, and traders are actually asking a barely impolite query.

When AI can hand a three-year-old startup a $29.3 billion price ticket, does cash nonetheless want crypto in any respect, or does crypto simply get pulled into the identical commerce beneath a special ticker?

The AI cash hose

A pleasant shut take a look at the insane funding numbers explains this temper.

Global AI startup funding reached round $100 billion in 2024, roughly 80% greater than in 2023 and near a 3rd of all enterprise capital that yr. S&P Global places generative AI funding at greater than $56 billion in 2024, almost double the prior yr.

The Stanford AI Index tracks non-public funding in generative AI at $33.9 billion for 2024, greater than eight occasions 2022. EY estimates that in simply the first half of 2025, generative AI startups raised one other $49.2 billion.

Crypto remembers what that appears like. In 2021, the sizzling trades had been token issuance, DeFi yield, and metaverse fairness. In 2024 and 2025, the middle of gravity moved. The large checks went into coaching runs, information facilities, and a small circle of basis mannequin labs. Barron’s counts roughly a 3rd of worldwide VC going into AI names like xAI, Databricks, Anthropic, and OpenAI.

On the public aspect, corporations are elevating big debt piles to chase GPU capability. Oracle is reportedly lining up round $38 billion of bonds to fund its cloud buildout. Nvidia’s information middle income has reshaped complete fairness indices. If you need publicity to “future money flows from compute,” the highest beta now lives in AI infra and basis fashions.

That doesn’t imply liquidity vanished from crypto. It means marginal {dollars} are priced towards a brand new benchmark. If a mid-size AI startup instructions a $30 billion valuation and OpenAI can speak about trillion-dollar capex plans with out being laughed out of the room, the bar for a $10 billion token with skinny real-world utilization will get increased.

AI tokens and the ASI experiment

Crypto did the logical factor: it tried to bundle AI inside tokens. The flagship effort was the Artificial Superintelligence Alliance, a plan to merge SingularityNET, Fetch.ai, and Ocean Protocol right into a single ASI token and model the entire stack as decentralized AI. Fetch.ai’s merger blog set out a easy gross sales pitch in 2024. One treasury, one token, three initiatives that claimed to cowl brokers, information, and fashions.

This labored for some time. Billions of {dollars} value of AGIX, FET, and OCEAN liquidity had been pointed at the identical narrative. Exchanges lined up spot and perpetual pairs for ASI. Retail holders bought migration bridges and one token that mapped cleanly to “AI” on a watchlist. It seemed like crypto had discovered a solution to compress a messy sector into one thing that might dwell in a single line of a derivatives blotter.

Then Ocean walked.

In October, the Ocean Protocol Foundation introduced its withdrawal from the alliance, asking to depeg OCEAN from ASI and relist it as a separate asset.

Ocean framed the exit as a matter of “voluntary affiliation.” Fetch.ai has since launched authorized motion, with courtroom filings tracing conversions of greater than 660 million OCEAN to FET and alleging damaged guarantees round the merger.

This little governance drama tells you one thing about the AI token commerce. It’s chasing the identical story as the non-public AI growth, simply with extra volatility and mainly no income. When ASI traded properly, everybody wished in. When valuations cooled and neighborhood politics reemerged, the “alliance” reverted to being three cap tables with totally different agendas.

From a liquidity perspective, AI tokens really feel much less like a separate asset class and extra like a manner for current cash in crypto to shadow what is occurring in non-public AI. Cursor’s newest spherical or Anthropic’s new funding from Amazon don’t transfer ASI on a strict foundation, however they set the emotional tone. Crypto merchants watch fairness offers and value their AI baskets accordingly.

From Bitcoin mines to AI mannequin farms

The clearest merger between AI and crypto sits in energy contracts. Bitcoin miners spent a decade constructing information facilities in cheap-energy areas, and AI hyperscalers are actually paying up for the identical megawatt base.

Bitfarms is the most specific case. The firm has introduced plans to wind down Bitcoin mining completely by 2027 and redeploy its infrastructure into AI and high-performance computing.

Its 18-megawatt facility in Washington state can be the first website transformed, with racks designed for Nvidia GB300-class servers and liquid cooling able to dealing with round 190 kilowatts per rack.

Bitfarms’ press launch describes a totally funded $128 million settlement with a big US information middle accomplice. Management claims that one AI facility might out-earn the firm’s complete historic Bitcoin mining earnings.

Bitfarms isn’t alone. Iris Energy rebranded as IREN and is shifting its hydro-powered websites into AI information facilities, with Bernstein analysis pointing to billions in anticipated income from Microsoft-backed GPU deployments.

Hut 8 talks overtly about being an influence first platform that may level 1,530 megawatts of deliberate capability to no matter workload pays finest, with AI and HPC at the prime of the checklist.

Core Scientific went far sufficient down this route that AI cloud supplier CoreWeave agreed a $9 billion all-stock deal to purchase it, aiming to lock up greater than a gigawatt of information middle energy for Nvidia-heavy clusters, earlier than shareholders pushed again.

The sample is the identical in every of those instances. Bitcoin mining gave these companies low-cost energy, grid connections, and typically hard-fought permits.

Then AI got here alongside and provided a better greenback per megawatt. For shareholders which have watched a number of halvings compress mining margins, routing power into GPU stacks clearly seems like swapping a maturing carry commerce for progress.

This is the place the “AI is eating crypto liquidity” headline will get literal for Bitcoin. Every megawatt that strikes from SHA-256 to GB300 or H200 is a unit of power that now not secures the community. Hash fee has continued to develop as new miners enter and older {hardware} is retired, however over time, a better share of low-cost energy can be priced by AI’s willingness to pay.

When AI assaults the rails

There is yet another junction between AI capital and crypto: safety.

In November, Anthropic revealed a report on what it known as the first large-scale espionage marketing campaign orchestrated by an AI agent. A China-linked group jailbroke the firm’s Claude Code product and used it to automate reconnaissance, exploit improvement, credential harvesting, and lateral motion throughout roughly 30 sufferer organizations.

Some of the assaults succeeded. Some failed as a result of the mannequin hallucinated pretend credentials and stole paperwork that had been already public. But the most alarming half was that the majority of the assault chain was pushed by natural-language prompts slightly than a room stuffed with operators.

Crypto exchanges and custodians sit proper in the center of that blast radius. They already depend on AI inside buying and selling surveillance, buyer help, and fraud monitoring.

As extra operations transfer into automated brokers, the identical instruments that route orders or look ahead to cash laundering will turn into targets. A dense focus of keys and sizzling wallets makes them engaging to any group that may level a Claude-sized agent at a community map.

The regulatory response to that form of occasion won’t care whether or not the affected venue trades Nvidia fairness, Bitcoin, or each. If a serious AI-driven breach hits a giant change, the coverage dialog will deal with AI and crypto as a single danger floor that sits on prime of crucial monetary infrastructure.

So is AI actually eating crypto liquidity?

The sincere reply is that AI is doing one thing extra attention-grabbing. It’s setting the value of danger for something that touches compute.

Venture cash that may as soon as have chased L1s is now funding basis fashions and AI infra. Public fairness traders are weighing 30% drawdowns in Oracle towards the probability {that a} $300 billion OpenAI cloud deal actually does repay.

Private markets are comfortable to worth a devtool like Cursor on par with a mid-cap token community. Bitcoin miners are rebranding as information middle operators and signing long-term contracts with hyperscalers. Token initiatives try to bolt “AI” onto their ticker as a result of that’s the place the pleasure sits.

Looking at this market from the depths of the crypto business makes it seem like a meals chain the place AI merely devours every part.

But alas, it’s all the time extra nuanced and difficult than it seems. Over the previous two years, AI has turn into the reference commerce for future computing, and that commerce drags Bitcoin infrastructure, AI tokens, and even change safety into the identical story.

So, liquidity isn’t leaving outright. It’s shifting round, pricing every part else towards the one sector that satisfied markets to fund trillion-dollar capex plans on a promise and a demo.

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