Bitcoin may face a longer-lasting macro challenge from the artificial-intelligence investment boom, even after the Federal Reserve eventually stops raising interest rates. According to CryptoSlate, minutes from the Fed’s Sept. 15-16 meeting showed market participants identifying heavy borrowing for AI infrastructure as one factor pushing up long-term Treasury yields and term premiums.
The issue is important because the end of a rate-hiking cycle does not necessarily mean that borrowing costs across the economy will fall quickly. If technology companies continue issuing debt to finance data centers, chips and energy infrastructure, they could keep competing with the US government and other borrowers for long-term capital. That competition may support higher yields at the far end of the Treasury curve, limiting the relief that crypto investors typically expect from a pause in monetary tightening.
Why AI financing matters for long-term yields
The Fed raised its federal funds target by 25 basis points in September to a range of 3.75% to 4%. Most officials also judged that another increase would probably be appropriate before the end of the year. However, the meeting minutes indicated that longer-term market conditions were being influenced by forces beyond the overnight policy rate.
Nominal Treasury yields increased by about 35 basis points across maturities from two to 10 years between the two Fed meetings. The minutes cited several possible contributors, including stronger economic data, expectations of further Fed tightening, geopolitical developments and uncertainty about Treasury buybacks. They did not specify how much of the increase was caused by AI-related financing.
Still, the scale of the technology buildout is large enough to affect the supply and demand for capital. The Bank for International Settlements estimates that the five largest technology companies will spend more than $1 trillion on AI-related capital expenditure during 2025 and 2026. Industry projections cited by the BIS place global AI investment at about $500 billion currently, with that figure potentially reaching $3 trillion to $4 trillion by 2030.
Companies initially funded much of the expansion through cash flow. As spending grows faster than earnings and free cash flow at some firms, debt and private credit are becoming more important sources of funding. The Fed’s trading-desk manager said debt spreads for major cloud providers remained wide because of the volume of borrowing and the long maturities involved. Market contacts also pointed to AI-related private issuance as one factor lifting Treasury term premiums.
What higher real yields mean for Bitcoin
Treasury data showed the 10-year Treasury par yield at 5.28% on Oct. 7, while the inflation-adjusted 10-year yield stood at 2.92%. Real yields measure the return available after accounting for inflation. When they are elevated, investors can obtain positive inflation-adjusted income from government securities, increasing the return required from riskier assets.
That creates a particular challenge for Bitcoin, which does not provide contractual cash flows. Investors comparing Bitcoin with bonds must weigh the cryptocurrency’s potential price appreciation against the volatility and drawdown risk associated with holding it. A Fed pause could reduce expectations for short-term rates without bringing equivalent relief if AI companies continue borrowing aggressively at longer maturities.
The Fed said changes in real rates accounted for most of the rise in longer-dated Treasury yields during the period between its meetings. For crypto markets, that means the level of 10-year real yields and the term premium may matter as much as the date of the final rate increase.
AI-linked equities have so far handled the higher financing costs relatively well. The Fed said companies benefiting directly from infrastructure spending outperformed the broader market, supported by stronger current and expected earnings, even as valuation multiples fell. That performance suggests investors have not yet broadly treated the spending cycle as an immediate financial problem.
A boom that could later reverse
The same borrowing cycle could produce a different environment if AI investment eventually creates more capacity than the market can use. The BIS has described the buildout as one of the largest technology investment booms in US history and warned that competition for future market share could encourage companies to commit more capital than eventual returns justify.
Greater reliance on debt would make the sector more vulnerable if revenue expectations weaken. A deterioration in expected returns could lead to financial stress and forced asset sales among heavily financed infrastructure owners.
Arthur Hayes, co-founder of the defunct BitMEX exchange, argues that the data-center race will ultimately result in excess computing capacity and a downturn. He has said that major technology rollouts have historically been overbuilt and expects financial stress to emerge as new capacity comes online, potentially around late 2027 or 2028.
Hayes’s Bitcoin thesis is effectively the reverse of the current market concern. If an AI downturn threatens highly indebted infrastructure companies, he expects policymakers eventually to respond with liquidity support, an environment he believes could benefit Bitcoin and other crypto assets. That outcome remains speculative. AI demand could instead grow fast enough to absorb new capacity, while stronger productivity and profits could justify today’s investment.
Moneyiar market picture
Moneyiar data at 11:14 a.m. on Oct. 9, 2026, showed Bitcoin at $82,426.69, up 0.03% over 24 hours but down 4.64% over seven days. TRON was $0.3323, down 0.92% in 24 hours and 0.80% over seven days. Cronos stood at $0.06092, down 2.06% and 12.52%, respectively. Plasma was $0.08421, down 2.36% over 24 hours and 14.70% over seven days, according to Moneyiar data recorded at 11:13 a.m.
For Bitcoin, the next macro test may therefore come after the final Fed hike rather than at the meeting where tightening ends. A sustained decline in the 10-year yield and term premium would ease concerns that AI capital demand is keeping financial conditions tight. Continued borrowing alongside high real yields would leave Treasuries and corporate credit competing strongly for marginal capital.
The Fed’s next meeting is scheduled for Oct. 27-28, while officials remain focused on inflation and the possibility of another rate increase before year-end. Beyond that decision, investors will be watching whether the AI investment race keeps the long end of the Treasury curve elevated—or whether a later reversal produces the financial stress and liquidity response described by Hayes.
