GSR’s head of markets, Spencer Hallarn, warned that the crypto market’s current slowdown is being driven by a powerful rotation of capital into artificial intelligence infrastructure. In an interview reported by WuBlockchain, Hallarn explained that large technology companies issuing equity to fund AI data centers and specialized chips are absorbing liquidity that might otherwise flow into risk assets such as cryptocurrencies, with Bitcoin facing particular pressure.
Hallarn said the next crypto bull run likely depends on two external catalysts: a cooling of AI-related capital expenditure and a Federal Reserve pivot toward interest rate cuts. Until those conditions appear, Bitcoin’s price recovery may remain subdued. He noted that the Fed’s policy path remains data-dependent, while big tech capital spending plans suggest the AI investment cycle could last years. He also did not promise a return to the aggressive bull cycles of 2021, instead tying a recovery to measurable macro variables.
The GSR executive also drew a distinction between tokenization hype and real utility. Many permissioned tokenization platforms with heavy KYC requirements are seeing paltry volumes, he said, while the real opportunity lies in fixing settlement and banking infrastructure. That view aligns with recent institutional activity such as the first live tokenized Treasury settlement between Ondo Finance and JPMorgan.
Against this backdrop, GSR is seeing institutional clients shift toward long-term budget planning and over-the-counter hedging structures, rather than rushing into tokenized assets for speculative gains. Hallarn suggested that if AI investment cools or the Fed cuts rates, liquidity could return and support significantly higher Bitcoin prices, though the timing remains uncertain.
