AI Shock Could Make the Dollar Blush—and $BTC Feel the Ripple

Deutsche Bank warned that an AI-led stock selloff could weaken the US dollar by breaking its traditional safe-haven pattern, potentially exposing Bitcoin, gold and foreign-owned US equities to a double downturn. More than $20 trillion in US shares are held by foreigners, and an estimated 90% of that value reflects price appreciation rather than underlying buying, according to George Saravelos, Deutsche Bank’s global head of FX research.

Bloomberg reported that Saravelos set out the scenario in a client note. “We estimate that roughly 90% of the $20+ trillion value of US equities owned by foreigners is attributable to price appreciation rather than underlying buying.” Foreign investors have historically avoided hedging US stocks because falling equities generally strengthened the dollar, but that dynamic reverses when a shock originates in the US, forcing investors to sell dollars to fund hedges.

That reversal occurred after “Liberation Day,” President Donald Trump’s April 2025 tariff announcement. The Bank for International Settlements found that hedging by non-US investors contributed to the dollar’s slide. Deutsche Bank’s comments did not specifically address Bitcoin or gold, although both rallied in August on a weaker dollar and Federal Reserve rate-cut expectations, with gold recording its best month since 1999.

Friday’s trading did not yet show Saravelos’s warning signal: falling US real yields alongside weaker stocks and a weaker dollar. Intel fell nearly 30% on a weak forecast, Amazon declined with other technology shares, and the S&P 500 was down 1.28% by mid-afternoon UTC, according to TradingView data. The US Dollar Index, which tracks the dollar against six major currencies, edged up 0.09%, while gold dropped 2.44% and Bitcoin traded lower.

Saravelos identified falling US real yields as the signal to watch because it could indicate that markets are cutting AI spending forecasts. He did not predict a crash and said dollar risks were more two-sided than markets had priced in recent weeks. Walter Bloomberg summarized the warning on October 30, 2026: “Deutsche Bank warns the US dollar may lose its traditional safe-haven status during an AI-driven stock market correction. Foreign investors hold over $20 trillion in US equities, with roughly 90% of that value attributed to….”