Tether's CEO Warns of Potential AI Bubble Impacting Bitcoin by 2026

Paolo Ardoino, CEO of Tether, expressed concerns over a possible AI bubble impacting Bitcoin’s performance as we look toward 2026. While he believes Bitcoin's reliance on capital markets could make it vulnerable, he remains optimistic about its future, especially with the growing acceptance of cryptocurrencies by institutional investors and governments.

Key Takeaways

Paolo Ardoino, CEO of Tether, warns the AI bubble could pose risks to Bitcoin by 2026.
He anticipates Bitcoin will not face severe price corrections like those witnessed in 2022.
Ardoino is optimistic about the tokenization of real-world assets but cautious about Europe's innovation environment.
He believes Europe is lagging in understanding and regulating cryptocurrency, which could hinder growth.

Tether CEO warns of AI bubble affecting Bitcoin

Concerns Over the AI Bubble's Effects on Bitcoin

Paolo Ardoino, the CEO of Tether, which issues the world's largest stablecoin, has voiced concerns about how the potential emergence of an AI bubble could influence Bitcoin by 2026. In his predictions, Ardoino noted that Bitcoin remains significantly correlated with capital markets, suggesting that the speculative activity surrounding AI technologies and companies could impact Bitcoin’s price.

Ardoino elaborated, stating, “That is the so-called AI bubble, this concern about the fact that AI companies are spending too much money on infrastructure and data centers while trying to develop extensive power systems and GPUs.”

A Stable Future for Bitcoin?

As he looks ahead, Ardoino predicts that there will likely be fewer dramatic drops in Bitcoin’s price, similar to the significant corrections in 2022 or early 2018. He believes that if the sentiment around AI shifts in 2026, any resulting turmoil in the stock market could also affect Bitcoin's value. However, he emphasized that, aside from the risks posed by the AI bubble, he foresees a generally positive environment for Bitcoin due to increasing adoption by pension funds and government entities.

Bitcoin (BTC) price chart since 2018. Source: CoinGecko

He stated, “I would imagine that sharp corrections of 80%, like we saw in 2022 or early 2018, might not be the case anymore.” Furthermore, Ardoino expressed his bullish view on the tokenization of real-world assets (RWAs), predicting that tokenized securities and commodities are likely to play a significant role in the future. Nonetheless, he cautioned, “Bitcoin should remain true to its essence. You wouldn’t want 99% of Bitcoin to be institutionalized."

A Cautious Outlook for Europe and Treasury Companies

Despite his optimism about Bitcoin and asset tokenization in 2026, Ardoino’s outlook for European crypto adoption is less favorable. He openly stated his concerns about innovation stagnation in the region, claiming, “I’m very bearish on Europe.” Ardoino highlighted that Europe consistently trails in innovation, stating, “Europe will always remain the last wheel of the cart whenever we talk about innovation.”

He criticized the European Union for attempting to regulate blockchain technology without fully understanding it, describing this situation as “very sad.” The CEO pointed to the implications of the EU’s Markets in Crypto-Assets Regulation (MiCA), which is fueling discussions about centralized versus local management of the crypto sector.

Tether’s stance against MiCA has made headlines, as it has led several European crypto asset service providers to remove Tether's USDt from their platforms.

Ardoino's Thoughts on Treasury Models

When discussing the landscape for digital asset treasury companies, Ardoino expressed reservations about firms that merely operate as treasury entities. “I think you want a treasury company to have an impressive operational backbone,” he noted, hinting at the potential of Tether-backed Bitcoin companies like Twenty One to diversify their operations and strengthen their positions in the market.