Tech Sector's AI Woes Drag Down Crypto Markets

The tech sector is experiencing a rough June, with major losses in the Nasdaq Composite and S&P 500. The Nasdaq fell over 4% in a single session, its worst day since April 2025, as investors reassess the risks of investing heavily in AI infrastructure. This has dragged down crypto markets, with Bitcoin trading between $62,000 and $67,000, significantly below previous highs.

The concern is not that AI doesn't work, but rather that the returns on this level of spending remain unclear. Six major companies - Microsoft, Nvidia, Oracle, Meta, Amazon, and Alphabet - plan to spend over $650 billion on AI-related capital expenditures in 2026, a staggering figure that rivals the GDP of many countries.

The market selloff is not new; in February 2026, approximately $1 trillion was wiped from the software and data services sector. However, it's become harder to ignore issues such as power constraints, talent shortages, and model pricing risks facing hyperscalers. These problems have led investors to reduce exposure to speculative assets like crypto.

The correlation between tech stocks and crypto is evident; Bitcoin and Ethereum moved in lockstep with the Nasdaq decline. As institutional investors get nervous about tech, they reduce their exposure to anything that feels speculative, including crypto. With monetary policy expected to tighten further, the pressure on both tech and crypto valuations could intensify.