Bitcoin News Today: Bitcoin Dips With AI Sell-Off as Correlation With Tech Deepens Risk Exposure

Bitcoin's fortunes are increasingly intertwined with the artificial intelligence (AI) sector, creating a volatile new dynamic in the cryptocurrency market. Recent declines in AI stocks have pulled Bitcoin down with them, amplifying concerns about a potential market correction. Analysts warn that Bitcoin has become a high-beta asset for the AI trade, meaning it reacts more intensely to market swings in the sector.

The link became evident on December 11, when Oracle's earnings miss caused a sharp drop in its stock and sent ripples through the broader tech market. Bitcoin dropped below $90,000 on the same day, mirroring the sell-off. The correlation between Bitcoin and tech equities has tightened as institutional and retail investors increasingly treat crypto as part of their risk-on portfolio.

Recent data shows Bitcoin's correlation with Nasdaq and Nvidia has reached near-perfect levels, with the 30-day Pearson coefficient standing at 0.53 and a three-month rolling average of 0.96 for Nvidia according to analysis. As AI-related valuations stretch and debt-fueled investments in data centers grow, the risk of a correction looms.

A Structural Link to AI Risk

Bitcoin's vulnerability lies in its deep connection to macroeconomic and liquidity trends. Chinese researchers have identified a strong relationship between Bitcoin prices and global M2 liquidity, suggesting BTC serves as a barometer for global financial conditions. If an AI-driven credit crunch emerges, Bitcoin is likely to bear the first blow.

Oracle's recent $50 billion AI data center plan, paired with a surge in long-term debt, has regulators on alert. The company's credit default swap spreads widened, signaling investor concern over its balance sheet. Analysts warn that similar overextended balance sheets across the AI sector could trigger a chain reaction, forcing leveraged players to reduce exposure and sell risk assets like Bitcoin.

The situation is exacerbated by the way AI infrastructure is being funded. Data shows AI-related deals jumped from $15 billion in 2024 to $125 billion in 2025, driven by bond issuance and private credit. Some structures resemble pre-2008 patterns, with opaque terms and untested risks. If AI-linked equities face a sharp correction, the impact on Bitcoin could be severe, particularly if leveraged funds are forced to cut exposure.

Policy Response and Future Scenarios

The response to an AI-driven correction could determine Bitcoin's next phase. If the sector's overleveraged nature forces central banks to ease financial conditions, Bitcoin may benefit from a liquidity rebound. History suggests a strong link between crypto and central bank easing. For example, following the 2020 market shock, aggressive quantitative easing helped push the total crypto market cap from $150 billion to over $3 trillion.

The Federal Reserve's interest-rate cut on Wednesday initially provided a tailwind for risky assets but was offset by concerns over AI valuations. If the AI correction forces growth to slow, the Fed and other central banks may re-ease to stabilize markets. This would likely boost Bitcoin, which historically performs well in low-rate, low-dollar environments.

Investor sentiment is also shifting. Recent capital flows have concentrated into Bitcoin rather than alternative cryptocurrencies, with dominance rising to around 57% according to market data. ETFs have become institutional on-ramps, giving Bitcoin a structural advantage as macro investors rotate out of overvalued AI stocks and into crypto as a speculative bet.

Bitcoin may yet survive the AI correction if central banks act swiftly and liquidity returns to markets. However, the immediate pain from an AI-driven sell-off could be severe. The question for investors is whether Bitcoin can endure the first wave and position itself to capture the next bull cycle if and when it arrives.