Why Is the Crypto Market Slowing Down Right Now?
The next Crypto Bull Run may not arrive until two things change. AI spending needs to slow down. And the Federal Reserve needs to cut interest rates.
That is the view from Spencer Hallarn, Head of Markets at GSR, a crypto trading firm. He shared his thoughts in a recent interview about where digital assets are headed next.
Hallarn said money is moving away from crypto right now. Big tech firms are selling stock to raise cash. That cash is going into AI infrastructure like data centers and chips.
This shift is pulling liquidity out of the wider market. And crypto is feeling the pinch.
How Are Big Tech AI Bets Affecting Bitcoin?
When large companies issue new equity, it soaks up cash that might otherwise flow into riskier assets. Bitcoin and other tokens often sit in that riskier bucket.
Hallarn explained that this pattern is tightening overall market liquidity. Less free cash tends to mean less buying pressure on crypto prices.
For a fresh Crypto Bull Run to take shape, that AI-driven cash drain would likely need to ease first.
What Are Crypto Clients Focusing On During the Slowdown?
According to Hallarn, GSR clients are not sitting still during this quiet period. Three themes keep coming up in conversations.
- Long-term budget planning
- OTC hedging structures
- Real-world asset tokenization, or RWAs
Traders and institutions appear to be preparing for a longer wait rather than expecting a quick turnaround.
Is Tokenization Actually Working Today?
Hallarn was blunt about the state of tokenization platforms. Many of them use walled gardens with strict KYC rules.
He noted these platforms often see very little real transaction volume. Wrapping an asset into a token does not automatically create demand for it.
Instead, Hallarn argued the real opportunity lies elsewhere. He said the bigger prize is fixing the plumbing behind traditional banking and settlement systems.
That means faster, cheaper, and more reliable ways to move money and assets. Tokenization only matters, in his view, if it solves that deeper problem.
Could Fed Rate Cuts Bring Bitcoin Higher?
Hallarn pointed to the Federal Reserve as a key swing factor. If the central bank starts cutting rates, more liquidity could flow back into markets.
That extra liquidity could support higher Bitcoin prices, he said. But he stopped short of promising any specific price target or timeline.
His comments read as open-ended rather than a guaranteed forecast. Markets, he suggested, need both conditions working together: cooler AI spending and looser Fed policy.
Key Factors Behind the Next Crypto Bull Run
| Factor | Current State | Needed Shift |
| AI investment | High, drawing capital away from crypto | Needs to cool down |
| Fed policy | Rates held tight | Needs rate cuts |
| Tokenization | Low volume, walled gardens | Needs open banking-grade infrastructure |
| Client focus | Budgeting, OTC hedges, RWAs | Longer-term positioning |
Bottom Line for Investors Watching a Crypto Bull Run
Hallarn's remarks suggest patience is the current strategy for many crypto desks. A Crypto Bull Run is not off the table, but it may depend on macro forces outside crypto itself.
Until AI capital spending eases and the Fed shifts course, liquidity could stay tight. That leaves Bitcoin and the broader market waiting on signals from Washington and Silicon Valley alike.
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