The Fed is probing if AI power prices will tank bitcoin

Federal Reserve officials, led by Chair Kevin Warsh, are holding a public forum to investigate AI's contradictory economic effects. The core debate is whether AI's promised productivity gains will lower inflation by making production cheaper, or whether its massive infrastructure demands—for electricity, chips, and data centers—are actually pushing prices up by straining resources.

This has direct consequences for financial markets, especially cryptocurrencies like Bitcoin. If AI cools inflation, interest rates could fall, making speculative assets like bitcoin more attractive. If AI's power-hungry boom keeps inflation elevated, high interest rates could persist, pulling investment away from crypto and into safer, yield-bearing assets. The policy outcome of this Fed forum could directly shape investor flows into or out of the crypto market.