Bitcoin maximalists dismiss $200B crash as AI-driven capital rotation

Hardcore bitcoin purists haven’t lost faith in the world’s largest digital currency, even after it lost nearly 17% of its value in the worst weekly performance since July 2024. That drop erased about $200 billion in market cap over seven days.

The prominent bitcoin advocates, known as maximalists or “maxis,” argue that capital is flowing out of crypto and into artificial intelligence. They see this as a temporary liquidity crunch rather than a fundamental problem with bitcoin itself.

Bitcoin is currently hovering below $60,000, down about 27% over the past month and more than 50% below its all-time high from October, according to CoinDesk data. The decline coincided with a record-breaking streak for U.S. spot bitcoin ETFs, which suffered $3.45 billion in outflows across 11 consecutive sessions.

Meanwhile, Wall Street’s appetite for tech remains strong. Even after a recent pullback, AI-related equities are among the market’s top performers. The Nasdaq rose 34% and the S&P 500 climbed nearly 24% over the last year. That has left some crypto investors anxious about bitcoin’s underperformance.

Maxis see AI as the culprit

Some market observers interpret the drop as a loss of structural confidence in bitcoin. But the maximalists argue the slump reflects speculative capital rotating heavily into AI instead.

Mati Greenspan, a market analyst, bitcoin maximalist, and founder of Quantum Economics, told CoinDesk that bitcoin’s price is trending downward not because investors doubt it, but because AI has become the dominant destination for speculative funds.

“Bitcoin is not facing a bitcoin problem. It’s facing a liquidity problem,” Greenspan said. “AI has become the market’s new obsession, but obsessions fade.”

Strategy Chairman Michael Saylor echoed that sentiment on X. “Capital markets are funding the AI buildout at historic scale: ~$400B over six months,” he wrote. “Bitcoin ETFs have seen ~$4B of outflows since May 14, pressuring $BTC. This is a capital rotation, not a bitcoin impairment. Volatility creates opportunity.”

The root cause debate

Greenspan pointed to Anthropic’s $50 billion IPO, targeting nearly a $1 trillion valuation, as a clear sign of where liquidity might have gone. He noted that traditional pools of capital are currently chasing AI infrastructure, data centers, and multi-billion-dollar private rounds.

Anticipated IPOs from OpenAI, Anthropic, and SpaceX could together raise more than $200 billion. That may be drawing investor attention away from speculative assets like crypto.

Bitcoin core developer and maximalist Jameson Lopp suggested that market downturns often fuel 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.

But not everyone blames AI. Some critics argue that pinning the drop entirely on AI oversimplifies a fragile macroeconomic environment. Jason Fernandes, a bitcoin maxi and market analyst, told CoinDesk the asset faces pressure from multiple fronts.

“$BTC is under siege from every angle right now,” Fernandes said. “ETF outflows, high interest rates, creeping inflation, money rotating back into hot tech stocks, macro uncertainty, and now the psychological shock of Michael Saylor’s Strategy selling $BTC after years of preaching ‘never sell.'”

Strategy sold 32 bitcoin for $2.5 million in late May — its first sale in four years — to fund dividend payments on its perpetual preferred stock. Critics said the move “damaged confidence,” but Greenspan dismissed the panic. “Selling 32 $BTC against a balance sheet of more than 843,000 $BTC is not even a rounding error,” he said.

Time to buy?

Despite the outflows, some maximalists argue it might be time to buy into the underperforming asset. They say bitcoin’s longer-term fundamentals remain intact.

Greenspan suggested the recent record outflows may be part of a rotation back toward monetary assets. He added that bitcoin’s current consolidation phase could serve as an accumulation zone if underlying network fundamentals hold. Institutional adoption, regulatory frameworks, and discussions around bitcoin as a strategic reserve asset have continued to mature over the last few years.

Strike CEO Jack Mallers encouraged investors to buy the dip on social media, bypassing broader market debates.

However, a rotation back into crypto is not guaranteed to be smooth. Greenspan warned that even if bitcoin’s weakness stems partly from capital flowing into AI, a reversal may not immediately benefit crypto.

“If AI sentiment cracks, bitcoin could get hit twice: first from liquidity leaving crypto, and then again from a broader risk-off move across markets,” Greenspan said. “As for what comes next, I would be careful assuming the bottom is already in.”

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