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Scott Melker · Oct 19, 2026 · 62 min

Bitcoin Fell Just 2% As AI Stocks Lost $1 TRILLION - What's Holding It Up? | Brent Donnelly

A Macro Monday panel with Brent Donnelly, Dave and Mike discusses a volatile weekend that saw AI and chip stocks gap down before recovering, and what it means for markets, AI capex and Bitcoin. Donnelly frames the US economy as a 'one-legged stool' resting on AI capex and a faith-based wealth effect, while Mike argues rising yields, midterm risk and a weak Bitcoin chart point to a stock-led pullback. Dave sees Bitcoin as an option on adoption and expects AI selling to pause, and the group debates the Fed's role, the dollar and Bitcoin's brand after institutionalization.

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Where they stand

Markets

Bearish

Mike expects a stock pullback into midterm volatility with yields high, while Dave expects relief after the selloff and Donnelly sees fragility tied to AI capex.

Medium conviction · weeks

AI

Neutral

AI capex is propping up the economy, but whether revenue can justify the spend is an open question, and faith in the trade is wobbling.

Medium conviction · years

Crypto

Neutral

Dave is long-term bullish on adoption while Mike and Donnelly see a dull or weak consolidation, with institutionalization and politics hurting the brand.

Medium conviction · months

Key takeaways

  1. Weekend liquidations hit chip stocks, but the open was far less bad than pre-market, and Dave warns that relying on weekend price signals is hazardous. He would not be surprised to see the AI selloff pause or reverse. 5:43
  2. Donnelly says weekend gaps in FX and oil usually retrace toward the Friday close, so fading them has been profitable, though 24/7 trading may change that. 9:33
  3. Donnelly's 'one-legged stool': AI capex absorbs borrowing, supports employment and a stock-driven wealth effect, but revenue must eventually justify the spend, and the market is having a crisis of faith. 12:56
  4. Mike argues bond yields near 5%, midterm volatility and a rolled-over Bitcoin indicator mean the next trade is stocks falling, and that bulls on crypto need the Fed to ease. 20:08
  5. Dave argues Bitcoin is an option on its own adoption, so it must stay volatile, and the 2025 rally was shallower than earlier ones; Donnelly expects a long, painful consolidation after parabolic busts. 21:14
  6. The group debates whether the Fed matters: Donnelly says the Fed follows the bond market and he does not factor it in, while Dave and Mike see it as a lagging puppet of bonds and stocks. 44:04
  7. Donnelly sees parallels to 1999-2000 in capital flows into US assets, but with a far more fragile dollar, and expects potential dollar downside over a few years if the AI capex story turns. 51:20

Calls and positions

  • The AI selloff in chip and infrastructure stocks may pause or reverse after the weekend scare, as doom calls often fail and shorts get caught.
    “I would not be remotely surprised to see the carnage in the AI sector, AI infrastructure sector uh pause if not reverse for a bit.”
    BullishPrediction: AI selloff pauses or reversesDave, Oct 19, 2026Watch at 7:55#Nvidia#S&P 500
  • The Fed will not hike for the rest of the year.
    “I don't think the Fed's going to hike the rest of the year.”
    BullishPrediction: no Fed hikes (rest of the year)Dave, Oct 19, 2026Watch at 7:55#Federal Reserve#Interest rates
  • A blue wave in the midterms would push back against data centers and crypto, which is bad for AI and adds volatility.
    “It's also push back against data centers. It's bad for AI.”
    BearishPrediction: Democratic landslide in midterms (midterms)Mike, Oct 19, 2026Watch at 33:29#AI capex#Bitcoin
  • Diesel and heating oil prices on a 12-month basis are at record highs and are virtually guaranteed to be lower in a year, pulling CPI down.
    “It's virtually guaranteed to be down from this apex”
    NeutralPrediction: lower diesel and CPI (a year from now)Mike, Oct 19, 2026Watch at 17:57
  • Over the next few years there is a lot of potential downside for the dollar, especially if the AI capex story turns.
    “zooming out over the next few years, I think there's a lot of uh potential downside for the dollar”
    BearishPrediction: dollar downside (next few years)Brent Donnelly, Oct 19, 2026Watch at 53:33#AI capex#US dollar

Views expressed

  • After a parabolic bubble bursts, assets like silver and crypto tend to go through a long, boring, painful consolidation rather than a quick return to a bull market.
    “once the bubble bursts, you just get a really long and boring”
    BearishBrent Donnelly, Oct 19, 2026Watch at 11:49#Bitcoin
  • After a parabolic move and break, owning options volatility is a poor idea because vol tends to be overpriced.
    “Owning volatility generally is not great after something goes parabolic and breaks”
    BearishBrent Donnelly, Oct 19, 2026Watch at 12:22
  • The market is shifting from believing AI spending will pay back to doubting it, and a funding shortfall could hurt companies like CoreWeave.
    “people moving from the yes camp to the no camp”
    BearishBrent Donnelly, Oct 19, 2026Watch at 15:44#CoreWeave#OpenAI
  • Bitcoin is an option on its own adoption and will therefore trade like power-law tech names with high volatility.
    “Bitcoin is a option on its own adoption”
    Very bullishDave, Oct 19, 2026Watch at 21:49#Bitcoin
  • The Bitcoin 50-week moving average rolling over is a leading indicator, and a bounce in other markets failing could mean a big trade for the downside.
    “the key ling indicator of Bitcoin's 50week moving average”
    Very bearishMike, Oct 19, 2026Watch at 20:41#Bitcoin#S&P 500
  • Bullish crypto positioning requires the Fed to ease, which would mean stocks go down more.
    “if you're bullish now this space you got to be expecting the Fed to ease”
    BearishMike, Oct 19, 2026Watch at 30:08#Bitcoin#Federal Reserve
  • The Fed is a lagging follower of the bond market, so it is not part of Donnelly's decision on whether to be long or short.
    “the Fed isn't even part of it for me”
    NeutralBrent Donnelly, Oct 19, 2026Watch at 44:38#Federal Reserve#Interest rates
  • Institutionalization and Wall Street adoption have badly hurt crypto's brand of decentralization and liberty, at least in the short term.
    “institutionalization is absolutely the worst thing I think that happened for you guys”
    BearishBrent Donnelly, Oct 19, 2026Watch at 38:25#Bitcoin
  • Gold and silver went parabolic and busted partly because of massive, widely missed leverage in the contract-for-differences market.
    “that amount of leverage was completely missed by most people in terms of what was happening”
    BearishDave, Oct 19, 2026Watch at 27:55#Gold

Companies, projects and topics mentioned

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