The tech sector is having a rough June. The Nasdaq Composite fell more than 4% in a single session, its worst day since April 2025, as investors collectively decided that maybe spending hundreds of billions of dollars on AI infrastructure deserves a second look.

The S&P 500 dropped 2.64% in the same session. And crypto, ever the loyal sidekick to risk-on sentiment, followed tech right off the cliff. Bitcoin is now trading between $62,000 and $67,000, well below its previous highs.

The $650 billion question

Here’s what spooked the market. Microsoft, Nvidia, Oracle, Meta, Amazon, and Alphabet have collectively indicated AI-related capital expenditure plans exceeding $650 billion for 2026. That’s not a typo. Six companies plan to spend more than the GDP of most countries on data centers, chips, and the infrastructure needed to keep large language models humming.

The concern isn’t that AI doesn’t work. It’s that the returns on this level of spending remain stubbornly unclear. When you’re a hyperscaler burning through capital at this pace, investors eventually want to see something beyond impressive demos and vague promises about enterprise adoption.

The February warning shot nobody heeded

The June selloff didn’t come out of nowhere. Back in February 2026, approximately $1 trillion in market value was wiped from the software and data services sector in a single week.

What changed between February and June is that the problems facing hyperscalers became harder to ignore. Power constraints are real. You can’t build data centers fast enough if you can’t secure the electricity to run them. Talent shortages in AI engineering continue to drive up costs. And model pricing risks, the concern that AI services might not command the premiums companies are banking on, started showing up in analyst notes with increasing frequency.

What this means for crypto investors

The correlation between tech stocks and crypto during this selloff tells a story that crypto purists won’t love. Bitcoin and Ethereum moved almost in lockstep with the Nasdaq decline, behaving less like independent stores of value and more like leveraged bets on risk appetite.

Bitcoin sitting in the $62,000 to $67,000 range in mid-June represents a significant pullback from where it was trading earlier in the year. The driver isn’t anything specific to Bitcoin’s fundamentals. It’s capital allocation. When institutional investors get nervous about tech, they reduce exposure to anything that feels speculative.

There’s an ironic dynamic at play here. AI is competing with crypto for the same pool of risk-tolerant capital. When AI equities sell off, the money doesn’t flow into crypto as an alternative. It flows into bonds, cash, and other safe havens.

If monetary policy continues to tighten, which analysts expect through the latter half of 2026, the pressure on both tech and crypto valuations could intensify. Rising rates make the opportunity cost of holding non-yielding assets like Bitcoin higher. They also make the debt-fueled capital expenditure plans of hyperscalers more expensive to finance.