Cryptocurrency markets zoned down on Thursday as bitcoin dropped beneath the level of the $90,000 mark, raising unease over the issue of risk appetites in the face of a rising doubt on the profitableness of artificial intelligence (AI) investments.
The decline in digital assets is part of a wider pattern of technology sell-off, which is an indicator of increased market uncertainty.
“What we saw last night was even though risk assets were doing well, crypto didn’t really want to know about it,”
Tony Sycamore said, market analyst at IG in Sydney.
“The crypto space really needs to see more convincing evidence that the washout we saw from that October 10 selloff is complete, and at this point in time it just doesn’t look like it’s there.”
Bitcoin and Ether Slide in the market
With a decline of 2.5% to $90,056, Bitcoin fell by the end of Thursday trading, and ether fell even more at 4.3% to $3,196.62 to wipe out the returns of the two days before it.
The selling pressure aggravated after Oracle announced reduced-than-anticipated profit and revenue forecasts and that the decrease is due to the increased AI infrastructure spending which has not started to pay off in the short term.
It is a positive sign that investors are reevaluating the expectations of the potential impact of AI on the profitability of technology firms.
The Risk Appetite is Weakened by the AI Profit Doubts
The Oracle projections hurt the mood not only in technology equities but also in cryptocurrency as Crypto continues to struggle with the consequences of the October crash, and today’s shifts only indicate the need to provide even more compelling evidence of recovery.
The general market mood was not so risky despite the reduction in the interest rates by the Federal Reserve this week which is the usual way to enhance risk assets.
Future Outlook for Bitcoin
The year-end bitcoin forecast by Standard Chartered was also recently revised to be lower by several $100000 instead of the $200000 it had predicted, signaling a more pessimistic view over the demand drivers.
Commenting on the falling purchases of bitcoin by corporations, Standard Chartered’s Head of Digital Asset Research, Geoff Kendrick said the bank is pushing back its timeline for Bitcoin reaching $500,000 and lowering its year-end price targets for 2026 through 2029.
“While the recent Bitcoin price decline has been rapid, we think it is within expected bounds..However, further corporate buying of Bitcoin is unlikely, as valuations no longer support it. This leaves ETF buying, which may be slower than earlier expected, to drive price gains from here. We lower our year-end price forecasts for 2026-29 and push out our $500,000 forecast to 2030. Not a crypto winter, just a cold breeze,”
The future of the bitcoin direction is thus largely reliant on the restoration of investor trust as well as involvement by key institutions in large numbers.
Without evident catalysts, the market is still likely to be volatile as there are still uncertainties in the profitability of AI.
