🧠 Fear is back, and it’s not just crypto

Wall Street finally hit the panic button last week.

The VIX (Wall Street’s fear gauge) surged to 20 for the first time since November, an indication that traders are preparing for rough waters. It wasn’t just a crypto thing, or a tech thing. It was a full-on sentiment turn.

The trigger? $660 billion in AI bets.

Big Tech kicked off the receipts this week and the sum was bigger than anyone imagined.

Amazon is set to spend $200 billion this year on infrastructure (yes, you read that correctly), 50 percent more than last year. Microsoft and Alphabet were among those to reveal soaring budgets associated with AI cloud infrastructure, chips and data centers.

The result? All three stocks got smacked.

Amazon fell 7.5% before rebounding Friday. The Nasdaq ended the week 1.8 percent lower. Even the S&P 500 went briefly negative for 2026.

The fear wasn’t dissipated by Friday’s rebound. The market simply seemed relieved that things weren’t worse.

Why was AI spending so freaky?

Because markets don’t object to spending, they object to uncertain returns.

For months, investors bought into the AI hype. And now, they are saying: Where’s the money?

Enterprise software stocks got clobbered: down 24% YTD.

Why? Because open-source AI tools like Anthropic’s Claude Code are now able to accomplish what once required expensive subscriptions. If these tools become widely adopted, then traditional SaaS models are in trouble.

Alphabet execs didn’t help. When they reported their earnings, they boasted on a call with analysts about A.I. lifting productivity, but investors read that as a sign of cost-cutting to come. Not growth.

Bitcoin was dragged into the mess

The tech stocks tumbled, Bitcoin fell below $64K, a figure not seen since Trump’s 2024 re-election rally. It rallied on Friday, ending barely above $70K, but the damage was done:

1. Strategy on Thursday registered a $12.4B loss

2. Gemini slashed 200 jobs and closed all of its offices outside the U.S. and Singapore

3. BTC is currently -42% down from its ATH of 126K$, wiping almost the entire euphoria Q4.

4. Even ETFs stopped helping. U.S. Bitcoin funds drain in 3 months reach $4B

Meanwhile, the Fed is stuck:

• Inflation is still over 3%

• January saw highest layoffs in 15 years

• Job openings fell to a 5.25-year low

But the Fed isn’t going to cut rates unless inflation cools more That leaves risk assets like AI and crypto stocks with no floor, particularly.

The bigger picture

All of this is unfolding even as global markets confront an AI-fueled identity crisis. AI spending is massive. But it’s consuming margins, spooking investors, and shattering previous models.

Bitcoin, sold to the world as uncorrelated with anything else is suddenly looking a whole lot like a leveraged tech stock. And the Fed? Another set is waiting on the sidelines to see “more data.”

This week’s jobs and inflation reports could determine the next big move.

A wallet long associated with Bitcoin’s elusive founder, Satoshi Nakamoto, just received 2.565 BTC, worth over $150,000. Several analysts and DeFi researchers on X, among them 0xNobler, flagged the unusual transfer.

👉 Read here

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