Tether CEO Warns of AI Bubble Threat to Bitcoin in 2026

Paolo Ardoino, CEO of Tether, the issuer of the world’s largest stablecoin, has sounded a cautionary note about the potential impact of an AI-driven bubble on Bitcoin by 2026. In an exclusive interview during the Bitcoin Capital podcast, co-hosted by Bitfinex Securities and Blockstream, Ardoino shared his insights on the future of Bitcoin (BTC) and the broader crypto industry, highlighting both opportunities and risks.

AI Bubble: A Looming Threat to Bitcoin

Ardoino’s primary concern revolves around the so-called AI bubble. He explained that the rapid spending on AI infrastructure and data centers by tech giants could lead to a stock market bubble, similar to the dot-com boom of the late 1990s. This bubble could, in turn, affect Bitcoin, which he believes is still too closely correlated with traditional capital markets.

“That is the so-called AI bubble, this concern about the fact that AI companies are spending too much money in AI infrastructure and data centers and trying to build a gazillion gigawatts of power and installing GPUs,” Ardoino said.

Potential Impact on Bitcoin

Ardoino predicts that if AI sentiment shifts negatively in 2026, the associated stock market turmoil in the US could ripple through to Bitcoin. However, he remains optimistic that Bitcoin will not experience sharp corrections like those seen in 2022 or early 2018.

“So I would imagine that sharp corrections of 80%, like we saw in 2022 or early 2018, might not be the case anymore,” Ardoino predicted.

Growing Adoption and Tokenization

Despite the AI bubble risk, Ardoino sees several positive trends for Bitcoin in 2026. He is bullish on real-world asset (RWA) tokenization, predicting that tokenized securities and commodities will become massive. This trend is already gaining traction, with companies like Tether exploring tokenized Bitcoin and other assets.

“The only downside I see is like. Bitcoin is for Bitcoin, right? You don’t want 99% of Bitcoin being institutionalized,” he said.

Pension Funds and Governments

Ardoino is also optimistic about Bitcoin’s growing adoption by pension funds and governments. This institutional interest could drive further price appreciation and adoption, making Bitcoin a more viable store of value and medium of exchange.

Europe and Digital Asset Treasuries

While Ardoino remains bullish on Bitcoin and tokenization, he expresses a far less optimistic view on crypto adoption in Europe and certain developments in digital asset treasuries.

“I’m very bearish on Europe,” Ardoino said in the interview.

MiCA and Centralization Debate

Ardoino points to the European Union’s Markets in Crypto-Assets Regulation (MiCA) as a significant obstacle to crypto innovation in Europe. The regulation has intensified the debate over centralized versus local oversight in the crypto sector, with many European crypto asset service providers delisting Tether’s USDT stablecoin due to its refusal to comply with MiCA.

“Europe will always remain the last wheel of the cart whenever we talk about innovation. Europe is trying to regulate something that it doesn’t understand yet. That is very sad,” he added.

Crypto Treasury Companies

Ardoino also expresses skepticism about crypto treasury companies that focus solely on traditional financial services. He believes that a successful treasury company should have a strong operational business and a significant Bitcoin treasury.

“I think that you want a treasury company to have an amazing operational business,” Ardoino said.

Conclusion

Paolo Ardoino’s outlook on Bitcoin and the crypto industry in 2026 is a mix of optimism and caution. While he sees significant opportunities in tokenization and institutional adoption, he also warns of the potential risks posed by an AI bubble and regulatory challenges in Europe. As the crypto industry continues to evolve, it will be crucial for stakeholders to navigate these challenges and capitalize on the opportunities that lie ahead.

FAQ

What is an AI bubble, and how could it affect Bitcoin?

An AI bubble refers to a situation where the stock market becomes overly optimistic about the potential of AI companies, leading to excessive spending on infrastructure and data centers. This could create a stock market bubble, which, in turn, could affect Bitcoin, as it is still closely correlated with traditional capital markets.

Why is Paolo Ardoino bullish on tokenization?

Ardoino believes that tokenization of real-world assets (RWAs) will become massive. Tokenized securities and commodities could provide new opportunities for investors and drive further adoption of Bitcoin and other cryptocurrencies.

What are the challenges facing crypto adoption in Europe?

The European Union’s Markets in Crypto-Assets Regulation (MiCA) is a significant obstacle to crypto innovation in Europe. The regulation has intensified the debate over centralized versus local oversight in the crypto sector, with many European crypto asset service providers delisting Tether’s USDT stablecoin due to its refusal to comply with MiCA.

What should crypto treasury companies focus on?

Ardoino believes that a successful crypto treasury company should have a strong operational business and a significant Bitcoin treasury. He is skeptical about companies that focus solely on traditional financial services.