AI agent adoption seen benefiting Ethereum and Solana over Bitcoin

A forecast says money could shift into cryptocurrencies if the artificial intelligence stock rally enters a pause. It also says the cryptocurrency uptrend could extend further if the dollar weakens.

On Oct. 6, blockchain media outlet Cointelegraph reported that Raoul Pal (Raoul Pal), co-founder of Real Vision, said high Treasury yields and a strong dollar are blocking the smooth flow of liquidity. He said a weaker dollar could signal further gains for cryptocurrencies, but added that not all conditions are in place yet.

Pal said AI and cryptocurrencies are competing for capital and that flows are shifting into crypto whenever AI stocks take a breather. Bitcoin rose about 25 percent from Aug. 19 to 25 to reach $80,000, while AI bellwether Nvidia fell for seven straight sessions over the same period.

He drew a line at the idea that a sharp drop in AI markets would be positive for cryptocurrencies. If an AI bubble bursts, liquidity could leave the system and weaken the environment needed for a crypto rise, he said. His preferred scenario is a weaker dollar, a steeper yield curve and an increase in money supply driven by expanded bank lending.

The yield on the 10-year U.S. Treasury rose to 5.29 percent in September, and the Federal Reserve raised its policy rate by 0.25 percentage point. Pal said even if those conditions do not materialise, there is room for money to move into cryptocurrencies if AI stocks trade sideways.