Will China’s Stock Market Crash Hit Bitcoin Price?

Currently, Bitcoin is maintaining a level near $80,400, while the STAR50 index, which experienced a 4.81% decrease on October 27, is part of a roughly 40% decline since July, wiping out approximately $480 billion. Two potential scenarios exist that could determine if the selling pressure will affect the cryptocurrency market.

One possibility for contagion reaching Bitcoin involves a mirroring effect on Wall Street, rather than a direct dumping of crypto assets from China. If forthcoming earnings reports from US technology companies indicate that the substantial expenditures on AI infrastructure continue to surpass the revenue they actually generate, worries regarding excessive valuation could spread throughout the market. The CSI 300 saw a drop of about 4.81% over the last 24 hours, with the index closing at 1,252.28, and market data suggests that technology stocks led the late-session selling. Nevertheless, because China prohibits crypto trading and has previously encouraged miners to operate outside the country, Chinese divestment lacks a direct route into Bitcoin. Instead, the primary risks reside elsewhere: Spot Bitcoin ETFs have created a closer link between BTC and tech stocks; fund managers frequently liquidate assets during periods of sharp equity declines; and US tech earnings might reveal that AI spending is still ahead of revenue. Furthermore, prediction markets indicate an increased probability of further downward pressure on Western chip and AI stocks, with Polymarket (@Polymarket) noting a "9% chance the U.S. AI bubble bursts by end of year" on October 27, 2026.

The second scenario questions whether capital might flow back into Bitcoin. Ki Young Ju, the CEO of CryptoQuant, recently argued that a downturn in the AI sector might scarcely impact Bitcoin. He stated that Bitcoin largely missed the surge driven by AI. In contrast, Scott Melker referenced comments made by ARK's Brett Winton, who mentioned that the capital required for AI computing acts as a "black hole," thereby increasing the cost associated with holding Bitcoin. The argument favoring a rise in price rests upon three pillars: investors who sold Bitcoin to pursue AI stocks might now return; Bitcoin is not reliant on state subsidies or chip supply chains; and a rotation of capital could bolster prices once the initial phase of risk-aversion selling subsides. Despite this, Ju cautioned that an AI crash does not inherently signal whether Bitcoin will become bullish or bearish, adding, "I don't think an AI bubble burst would hurt BTC much. Bitcoin missed the entire AI rally. Those who bought AI stocks may have already sold their BTC. Now it may be time to rotate back into Bitcoin. AI crash isn't necessarily bullish or bearish for BTC. They seem unrelated," as posted by Ki Young Ju (@ki_young_ju) on October 22, 2026.

Regarding the immediate future price movement for Bitcoin, traders are currently monitoring specific price thresholds. Ted Pillows observed that Binance has maintained its purchasing activity, adding that Bitcoin requires a daily closing above $81,000 to regain its upward momentum. Concurrently, Michaël van de Poppe highlighted a week filled with significant macroeconomic events and earnings reports, noting that a strengthening bearish agreement often surfaces near a local low, suggesting an upside surprise remains a possibility. While numerous macroeconomic occurrences will influence markets this week, the prevailing sentiment appears to be that markets must decline alongside #Bitcoin and other markets, a consensus that is reportedly growing stronger. Michaël van de Poppe (@CryptoMichNL) posted on October 26, 2026, stating, "The consensus is even getting stronger. Usually, when this is the type of momentum in the markets, we're getting..."

In conclusion, the trajectory of Bitcoin might depend less on developments in China and more on the endurance of the narratives surrounding US AI spending. For the time being, markets are awaiting signals from the Federal Reserve and corporate earnings.