Bitcoin fell about 7% in October, missing the month’s often-cited seasonal rally known as “Uptober.” The decline came as AI-linked trades weakened, oil futures rose and US Treasury yields fell, breaking a correlation between oil and yields that had been about 80% this year. The divergence has refocused attention on whether the outlook for AI investment has become a greater market concern than geopolitical risk.
Bitcoin briefly dropped about 4% late Thursday, before the Nasdaq weakened on Friday. The decline also came around the time of a major hack involving Binance, though the available information does not establish a causal link between the incident and Bitcoin’s fall.
AI stock weakness shifts the oil-and-bond signal
Jeffrey Rosenberg, a senior portfolio manager at BlackRock, said October’s pullback in AI stocks was a key factor behind the divergence between oil prices and Treasury yields. Shares of the large US technology companies known as the “Magnificent Seven,” all closely tied to the AI trade, came under pressure during the month.
Rosenberg said investors now see AI risk as taking precedence over geopolitical risk. In his view, weakness in the AI sector has been read as a potential signal of slower US economic growth, putting downward pressure on Treasury yields. Oil prices continued to rise, however, leaving the two markets moving in opposite directions rather than tracking one another as they had earlier in the year.
The shift offers a useful backdrop for digital assets: Bitcoin’s October decline coincided with a technology-stock pullback and changing views on macroeconomic risk. The available information does not establish how much each factor contributed to Bitcoin’s losses.
Strong investment growth, but AI outlook remains in focus
Rosenberg described US third-quarter GDP performance as strong and pointed to AI-related investment as one contributor. Business investment grew 12.7%, its largest increase since 2011 outside the pandemic period.
The strong investment figure has come alongside concerns about AI-related risk, leaving investors to assess whether current capital spending can continue and what the performance of AI-linked companies means for US economic growth. October’s market moves also showed that seasonal patterns did not prevent Bitcoin from falling. The divergence between oil, Treasury yields and large technology stocks offers another set of indicators of shifting risk sentiment.