Coinbase CEO Says Bitcoin Won’t Break Even If AI Pays Miners 20x More

Bitcoin News

Coinbase chief executive Brian Armstrong pushed back on claims that the artificial-intelligence boom could break Bitcoin (BTC), arguing the Bitcoin network absorbs any miner exodus. Billionaire Chamath Palihapitiya had suggested that redirecting compute to AI can generate 10 to 20 times more revenue than mining, potentially triggering a structural crisis. Armstrong countered that energy cost does not set market value: Bitcoin’s automatic difficulty adjustment lowers the required hashrate if half of all miners leave, keeping block times steady while remaining operators face less competition. He framed inflation and widening fiscal deficits — not electricity spent on ASIC mining — as the real driver of demand for a scarce digital asset.

Bitcoin’s reclaim of the $65,000 level triggered a wave of forced short liquidations across derivatives venues. Over the past 24 hours, roughly $240.36 million in positions were wiped out, with short liquidations of $134.8 million outpacing $105.56 million in long liquidations — the signature of a short squeeze as bears rushed to cover. Exchange data counted 69,546 liquidated traders, and the single largest event was a $7.85 million BTCUSDT position on Binance. Bitcoin alone accounted for $57.46 million in liquidated shorts against just $25.27 million in longs, while Ethereum showed a parallel pattern as prices climbed.

A more structural shift is Bitcoin’s decoupling from technology stocks. As the Nasdaq-100 slipped on stretched AI valuations — dragging IBM, Oracle, ARM and Intel lower — Bitcoin held firm and pushed back above $65,000, behaving increasingly like an independent asset class. Yet derivatives remain cautious: the perpetual funding rate, the periodic payment that keeps futures anchored to spot, sits near a neutral 8% annualized, well under the 12%-plus seen in overheated markets. The 200-week simple moving average near $63,322 is holding, but reclaiming the 200-week exponential average around $68,500 is needed to confirm strength. One analyst warns the four-year cycle may still be mid bear market, roughly 70% complete.

Capital rotation into altcoins remains muted. The Altcoin Season Index reads 53, up from 50 a day earlier and 51 last week, but still far below the 75 threshold that signals a genuine altcoin season — placing the market in a neutral band. Bitcoin dominance edged up to 58.7% from 58.4% a week ago, while the broader altcoin share slipped to 31.0%; Ethereum dominance rose to 10.3%. Bitcoin’s market capitalization stood near $1.308 trillion. The reading suggests the return gap between Bitcoin and its rivals is narrowing rather than money broadly rotating away, keeping flows Bitcoin-centric for now.

Strategy (MSTR) sharpened its focus on balance-sheet resilience, disclosing that its Bitcoin reserves now cover an estimated 31 years of preferred-stock dividend payments, while its dollar reserves cover about 1.8 years. According to the company’s investor-relations disclosure, the dollar buffer reached $3.225 billion as of July 19, earmarked for preferred dividends and debt interest. The firm still holds 843,775 BTC acquired at an average price of $75,476, for a total cost near $63.69 billion. A company executive noted that cash-only coverage for its STRC perpetual preferred series had reached 20.4 months, up from earlier disclosures as fresh capital improved liquidity.

The same filing confirmed Strategy has paused its aggressive Bitcoin accumulation. Between July 13 and 19, the firm sold 2,732,318 Class A MSTR shares through its at-the-market program, raising net proceeds of about $263.5 million, yet purchased no Bitcoin during the window. Its holdings have stayed flat at 843,775 BTC since the last disclosed acquisition on June 22. The SEC filing shows substantial remaining issuance capacity: roughly $23.53 billion under the MSTR ATM program, alongside $17.5 billion in STRC, $4.01 billion in STRD, $2.1 billion in STRK and $1.62 billion in STRF, plus a separate $21 billion program announced in March.

Reading our own data, COINOTAG’s proprietary 42-indicator composite S/R scoring engine rates the $66,797 resistance at 94/100 — the strongest level on the board — driven by a confluence of a support-to-resistance flip, the ATR upper band, the Fibonacci 0.382 retracement and the R2 pivot. Beneath price, the engine scores the $63,807 support at 83/100 on the EMA 20, a high-volume node and the Ichimoku Tenkan. Derivatives lean constructive: funding is a mild 0.0041%, open interest sits at $12.72 billion and the long/short account ratio of 1.33 shows 57.1% of accounts long. With RSI at 57.6 and MACD bullish in an uptrend, yet our Fear & Greed reading at 25 (Extreme Fear), a clean break above $66,797 opens $69,289; losing $63,807 invalidates the bullish case.