A sharp fall in AI stocks or a rise in government bond yields could put Bitcoin (BTC) and other cryptocurrencies under pressure. Even if the crypto market faces no direct problems, investors may sell their digital assets to cover losses elsewhere.
The International Monetary Fund (IMF) highlighted these concerns in its October 13 Global Financial Stability Report. The report warned about a possible AI stock market correction, higher bond yields, and major cyberattacks. Although the IMF did not predict a crypto crash, these risks could cause wider market losses and put pressure on Bitcoin and altcoins.
How a Selloff in AI Stocks Could Affect Bitcoin
Businesses are investing billions of dollars in AI initiatives, such as new data centers and other infrastructure. However, the IMF cautioned that these investments might not pay off for investors as hoped. If profits fall short of expectations, AI stocks may drop in value.
The agency also warned about the debt companies are taking on to finance their growth. If AI stocks fall sharply, investors facing losses may sell Bitcoin or other cryptocurrencies to raise cash. Large trading firms with exposure to both stocks and crypto could also reduce their positions across markets, although the extent of any such selling would depend on their financial circumstances.
Thus, Bitcoin could face pressure because it trades 24 hours a day, allowing investors to sell it outside traditional stock market hours. Smaller cryptocurrencies may see steeper declines if large investors sell, particularly when borrowed funds have amplified their exposure.
This is not a signal that Bitcoin’s price will fall if AI stocks drop. The danger arises if investors withdraw funds from multiple markets at once. In that scenario, cryptocurrencies with no direct connection to AI could also come under pressure.
Higher Bond Yields Could Hurt Crypto Investors
The IMF also cited rising government borrowing costs. Pressure on government bond markets is growing amid high debt, inflation concerns, and large bond sales. Bond prices fall as yields rise. Relatively safer investments may then become more appealing, while borrowing costs can increase. Consequently, investors may be less inclined to purchase assets with uncertain returns.
For crypto, the effect may be uneven. Bitcoin has a stronger market position and deeper trading activity, but that does not make it immune to a broad selloff. Smaller tokens often depend more heavily on speculative demand. They may struggle when borrowing becomes expensive or buyers retreat.
Borrowed positions add another danger. If prices fall far enough, exchanges can automatically close leveraged trades. Those forced sales may push prices down further, triggering additional liquidations. The IMF’s warning about leverage in traditional markets also matters for crypto: traders facing losses elsewhere may sell their cryptocurrencies to raise cash, even if their confidence in those assets has not changed.
Cyber Threats Raise a Different Risk for Crypto
Cyberattacks could pose a more direct risk to crypto. The IMF warned that attacks on major banks, payment systems, or technology providers could disrupt financial services. Its October report also found that, in more than 70% of reported software security incidents during the period covered, attackers exploited weaknesses before providers had much time to fix them. This figure covers software security incidents across different sectors, not just crypto, and does not mean that the same pattern applies to crypto platforms specifically.
A cyberattack could delay withdrawals or disrupt trading on crypto exchanges and custodians. Disruptions at payment providers or stablecoin issuers could also prevent users from transferring or redeeming their funds promptly. Even if a stablecoin maintained its intended value, operational problems could temporarily limit access to it.
The warning is not a prediction of Bitcoin’s next price movement, but rather a signal about broader financial stability risks. An AI correction, higher yields, and a cyberattack could affect crypto through different channels. Investors should therefore pay attention to liquidity, borrowing, and access to funds rather than assume that all digital assets will behave in the same way.