Tether CEO Paolo Ardoino has identified a potential AI-driven bubble as Bitcoin's biggest risk heading into 2026. However, he does not anticipate the same sharp corrections seen in previous market cycles, citing growing institutional adoption as a stabilizing force.Tether CEO Paolo Ardoino has identified a potential AI-driven bubble as Bitcoin's biggest risk heading into 2026. However, he does not anticipate the same sharp corrections seen in previous market cycles, citing growing institutional adoption as a stabilizing force.

Tether CEO: AI Bubble Poses Biggest Risk to Bitcoin in 2026

2025/12/19 16:05
News Brief
Tether CEO Paolo Ardoino has identified a potential AI-driven bubble as Bitcoin's biggest risk heading into 2026. However, he does not anticipate the same sharp corrections seen in previous market cycles, citing growing institutional adoption as a stabilizing force.

Paolo Ardoino expects milder corrections due to institutional adoption

Risk Assessment

Tether CEO Paolo Ardoino has identified a potential AI-driven bubble as Bitcoin's biggest risk heading into 2026. However, he does not anticipate the same sharp corrections seen in previous market cycles, citing growing institutional adoption as a stabilizing force.

Ardoino's comments offer insight into how industry leaders are evaluating emerging threats to cryptocurrency markets.

The AI Bubble Concern

The rapid growth of artificial intelligence investments has drawn comparisons to previous speculative bubbles. Ardoino suggests that an AI market correction could trigger broader risk-off sentiment, potentially dragging Bitcoin and other assets down alongside technology stocks.

AI-related equities have driven significant stock market gains in recent years. A sudden revaluation of AI company prospects could create contagion effects across correlated asset classes, including cryptocurrencies that have increasingly moved in tandem with tech sector sentiment.

Why This Cycle May Differ

Despite identifying AI as a key risk, Ardoino expressed optimism that Bitcoin would avoid the severe drawdowns characteristic of earlier cycles. Previous bear markets saw Bitcoin decline 80% or more from peak to trough.

Institutional adoption represents the primary difference. Spot Bitcoin ETFs have attracted billions in capital from traditional investors, pension funds, and asset managers. These longer-term holders typically demonstrate less panic-selling behavior than retail-dominated markets.

Additionally, corporate treasury allocations and sovereign interest in Bitcoin have expanded the investor base beyond speculative traders.

Market Maturation

Ardoino's outlook reflects a broader thesis that Bitcoin is maturing as an asset class. Deeper liquidity, regulated investment vehicles, and institutional infrastructure may dampen volatility over time.

While risks remain, the growing presence of sophisticated investors could provide support during market stress that was absent in previous cycles.

Market Opportunity
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