GSR Crypto Market Maker Reveals Crypto Slowdown Cause

Bitcoin’s sluggish momentum this year has a lot of crypto traders scratching their heads, but according to one of the industry’s biggest liquidity providers, the answer may not be inside crypto at all. Spencer Hallarn, Head of Markets at GSR, the prominent GSR crypto market maker, said in a recent interview that the slowdown gripping digital assets is being driven in large part by capital quietly rotating into artificial intelligence infrastructure, pulling liquidity away from crypto markets just as investors had hoped for a fresh leg higher.

Key takeaways

• GSR’s Spencer Hallarn says the crypto market slowdown is partly driven by capital shifting toward AI investments.
• Big tech firms issuing equity to fund AI infrastructure are tightening broader market liquidity.
• Clients are leaning more on long-term budget planning, OTC hedging, and real-world assets (RWAs).
• Walled-garden tokenization platforms with heavy KYC rules are struggling to generate meaningful transaction volume.
• Liquidity could improve — and support higher Bitcoin prices — if AI investment cools and the Federal Reserve cuts rates.

Capital Rotation to AI Investments Drains Crypto Liquidity

The short version of GSR’s read on the market: money that might otherwise be chasing crypto is instead flowing toward the AI buildout, and that is squeezing the liquidity crypto traders rely on. Hallarn’s comments point to a structural competition for capital rather than a crypto-specific problem, which changes how the current stall should be interpreted.