Why this is the worst crypto winter ever: AI crowds out crypto for mindshare and power grid access, crypto is mainstream, gold beats BTC as a safe haven, more
and delivered. A few who stayed to push “adoption” got rich.The Plebs got smoked In the meantime China caught up with AI. The rest is just shaving.Mario S. /@covered_call:According to Artemis data DATs are down ~$25B cumulatively, with zero above their cost basis. https://app.artemisanalytics.com/ ... [image]Jay Yarow /@jyarow:You know the bottom is in when the most square MSM people are talking about itJoe Weisenthal /@thestalwart:This is the key thing. It's not about price. It's about loss of
Bloomberg
Context & Ripple Effects
The downturn follows a sharp reversal from the period when Bitcoin’s run above $89K lifted crypto-linked equities and a later broad market-value decline reported by CoinGecko. Bitcoin’s subsequent drop to $60K makes this episode a test not only of price resilience but also of crypto’s claim to safe-haven status.
This coverage frames the current winter as unusually difficult because AI is competing with crypto for investor attention and power-grid influence at the same time that crypto has become mainstream. Artemis’s reported $25B cumulative loss for DATs, with none above cost basis, concentrates the immediate pressure on those vehicles.
First-order effects
DAT investors face marked unrealized losses and no reported cohort trading above cost basis, limiting their room to absorb further volatility.
Bitcoin’s safe-haven narrative weakens in the near term as gold outperforms it during the selloff, while AI captures attention and grid-access influence.
Second-order effects
Crypto firms and advocates must compete more directly with AI projects for visibility and infrastructure influence, rather than relying on crypto’s novelty to draw capital and attention.
The contrast with the earlier crypto-linked equity rally raises the risk that investors treat crypto exposure as cyclical risk capital rather than a defensive allocation.
Third-order effects
If AI continues to command scarce power-grid access and market attention, crypto’s infrastructure position may become more contingent on demonstrating economics beyond speculative demand.
The episode points to a wider legitimacy gap: mainstream adoption does not by itself establish Bitcoin as a reliable safe haven, especially when its performance diverges from gold in stress periods.
The trend: AI’s infrastructure buildout is reshaping which digital-asset narratives and energy-intensive business models can attract capital, attention, and resource access.
TL;DR Why this might be the worst crypto winter, even worse than FTX or 10/10? Author's thesis: This may not be the biggest drawdown ever, but it's the most structurally negative environment crypto has faced because multiple support narratives are breaking at once. Main
@TheStalwart definitely agree with most of these esp the ai risk for tech talent & hardware, but there's definitely still a ton of ppl online on crypto twitter, bitcoin & ethereum are pretty fragmented but hyperliquid & solana are likely the most close knit communities atm
@TheStalwart @Crypto_McKenna I think this is worse than FTX because crypto was saying back then that FTX wasn't a crypto specific scam. But now feels more like a real identity crisis for crypto
i don't think it was necessarily a “last gasp” for the entire industry, but it definitely seems to have marked the ending of a chapter. i'd argue crypto's now in an institutional era and that means there's a lot of uncomfortable change taking place
@TheStalwart Crypto's main legacy : it accidentally gave the U.S. an edge in AI deployment. An entire “web3” industry quietly pivoted to AI—and delivered. A few who stayed to push “adoption” got rich.The Plebs got smoked In the meantime China caught up with AI. The rest is just s…
Crypto has had bigger drawdowns before. But this is definitely the worst crypto winter ever. Writing about it for today's newsletter, which you can sub to here. https://www.bloomberg.com/...
This is the most brutal crypto winter ever. Nobody's even joking about it in a self effacing way. And if there were anyone doing the meme, you wouldn't see it because there's no crypto twitter anymore.