CZ blames AI surge and geopolitical strain for 2026 crypto slump

Zhao identifies the rapid expansion of artificial intelligence as a primary driver for the current liquidity shift. As investors pivot toward AI infrastructure, chips, and robotics, capital that previously fueled digital asset rallies is finding new homes. This rotation represents a temporary reallocation of speculative interest rather than a permanent abandonment of blockchain technology.

Beyond capital movement, the market is grappling with the persistence of the four-year cycle and heightened geopolitical instability. While Bitcoin’s current valuation remains significantly higher than its 2022 lows, the integration of institutional tools—including spot ETFs and corporate treasury holdings—has altered the asset's traditional behavior. Zhao remains optimistic about the long-term trajectory of the industry, citing the inevitable growth of financial technology as a foundational force. He maintains that while legislative efforts like the CLARITY Act provide necessary regulatory clarity, the sector’s evolution will ultimately be defined by its ability to integrate into daily economic life.