AI Capex & Stablecoins Power Next Crypto Rally
Despite a $19 billion October sell-off that saw Bitcoin tumble from $126,300 to $107,000 and Ethereum slide from $4,800 to $3,500, the next crypto rally remains on track. Galaxy Digital’s Alex Thorn points to excessive leverage, thin order books and automated deleveraging as key triggers, alongside macro headwinds from weak chip stocks, hawkish Fed policy and banking concerns.
Thorn identifies three structural drivers for the next crypto rally: massive AI capital expenditure by hyperscalers and chipmakers, deeper liquidity via USD stablecoins, and real-world asset tokenization moving from pilots to full implementation. He views Bitcoin as “digital gold,” while Ethereum and Solana stand to benefit from stablecoin use cases and asset tokenization.
Short-term market conditions remain fragile, with thin liquidity and cautious sentiment. However, once markets absorb recent shocks, these long-term tailwinds should underpin a renewed crypto rally.
Bullish
The news highlights three major structural tailwinds—AI capital spending, stablecoin liquidity and asset tokenization—that are poised to drive a sustained crypto rally despite short-term volatility. Excessive leverage and thin order books caused the October sell-off, but these factors are transient. In the short term, traders may face cautious sentiment and liquidity gaps. Over the long term, AI-driven capex by hyperscalers will increase network demand, USD stablecoins will deepen market participation, and real-world asset tokenization will broaden on-chain use cases. Together, these drivers support a bullish outlook for Bitcoin, Ethereum and Solana once markets absorb recent shocks.