The unchecked enthusiasm for Artificial Intelligence, often referred to as the "AI bubble," has driven valuations to historic levels. However, this exaggerated optimism has created an environment of unrealistic expectations. When signs of deceleration or results below expectations emerge, the adjustment is abrupt and severe.
It is in this context that the recent and significant drops in the shares of giants like Oracle and Broadcom are inserted. Although with distinct profiles, both have been penalized by the market for indicating potentially weaker demand in the short term for AI infrastructure. The correction of these heavyweights signals a moment of selectivity and groundedness, after the initial euphoria.
At the same time, the yield on American Treasuries (U.S. debt securities) continues to act as a fundamental gravitational force. With the Federal Reserve (Fed) maintaining high interest rates to combat inflation, these securities become attractive and low-risk investments. This movement drains capital from assets considered more speculative, such as American technology stocks, which lose relative attractiveness.
Bitcoin, often viewed as a risky asset and an alternative store of value, is not immune to this macroeconomic dynamic. The flight to quality towards Treasuries, combined with the weakening appetite for risk in technology, exerts selling pressure on the cryptocurrency. Consequently, the decline of Bitcoin reflects not only internal factors of its ecosystem but also this broader scenario of liquidity contraction and risk reassessment in global markets.
Thus, an interconnected circuit forms: the deflation of the AI bubble exposes vulnerabilities in overvalued sectors, the attractiveness of high U.S. interest rates redirects capital flows, and volatile assets like cryptocurrencies absorb the impact, demonstrating the deep connection between traditional and new finance today.$ETH $BNB #n|#USJobsData #Binanceholdermmt #BinanceHODLerMorpho #ETHBreaksATH #WriteToEarnUpgrade
