The balance of power between artificial intelligence and cryptocurrency has shifted dramatically in recent months. At a time when the crypto sector hoped for massive institutional adoption following the arrival of spot Bitcoin ETFs in the United States, a major signal reminds us that competition for capital is fierce. Temasek, the Singaporean sovereign wealth fund with $380 billion in assets, has officially closed the door to crypto investments after the trauma of the FTX crash in 2022.
At the same time, two major initial public offerings in the artificial intelligence sector have captured tens of billions of dollars, diverting the attention and capital of institutional investors away from the crypto ecosystem. This shift defines a new reality for the digital assets industry: while banks are gradually adopting blockchain technology for their operations, the largest sovereign wealth funds and the most sophisticated investors are resolutely turning their gaze toward AI.
The narrative of “AI versus crypto” for the allocation of institutional capital has never been more relevant. The year 2026 is shaping up to be a pivotal moment where these two technologies, which are complementary in many respects, find themselves in direct competition to attract the same investors.
Temasek closes the crypto chapter after the FTX fiasco
Temasek Holdings, one of Asia’s most respected and influential sovereign wealth funds, has made official its definitive exit from the cryptocurrency sector. This withdrawal follows the massive loss the fund suffered through its stake in FTX, the exchange founded by Sam Bankman-Fried that collapsed in November 2022. Temasek’s management acknowledged that this investment had been a costly mistake and that the lessons learned from this episode had profoundly altered the fund’s perception of digital assets.
Temasek’s decision is all the more significant because the Singaporean fund was considered one of the most advanced and sophisticated investors in the crypto sector. Before the collapse of FTX, Temasek had led several funding rounds in blockchain startups and had taken stakes in specialized investment funds. The loss of credibility of the sector after the fall of FTX was such that the fund preferred to reverse course rather than risk renewed exposure to an asset now deemed too volatile and too opaque.
This retreat does not only concern cryptocurrencies themselves. Temasek has also reduced its exposure to decentralized finance startups and blockchain infrastructure. The message sent by the sovereign wealth fund is clear: Asian institutional money, long seen as a potential driver of crypto adoption, is now turning to other horizons. And those horizons are called artificial intelligence.
Impact on the institutional perception of crypto
Temasek’s decision is not an isolated case. Other sovereign funds and institutional investors have revised their positioning toward digital assets after the scandals that shook the sector in 2022 and 2023. While central banks and traditional financial institutions continue to explore blockchain technology for specific use cases — such as cross-border payments or asset tokenization — the appetite for cryptocurrencies as an investment class has clearly diminished.
This institutional disaffection contrasts with the growing adoption of Bitcoin and Ethereum by retail investors and by certain specialized hedge funds. But for the big capital allocators — pension funds, sovereign wealth funds, insurance companies — crypto remains an asset that is too risky, too lightly regulated, and now in direct competition with artificial intelligence for innovation and investment budgets.
The figures speak for themselves. Where crypto startup fundraising has fallen significantly since 2022, investments in AI have exploded, driven by the commercial success of ChatGPT and large language models. Institutional investors follow the trend: they go where growth is, and currently, growth is in AI.
Two blockbuster AI IPOs capture capital
The second aspect of this shift concerns initial public offerings in the artificial intelligence sector. Two major IPOs, whose names have dominated the headlines in the international financial press, have attracted considerable amounts of institutional capital in recent weeks. These IPOs have been described as “blockbusters” by analysts because of the stratospheric valuations achieved and the appetite of investors for AI-related stocks.
These operations captured the attention of the same institutional investors who might have, in another context, allocated a portion of their portfolios to cryptocurrencies or blockchain startups. The phenomenon is amplified by the macroeconomic context: in an environment of still relatively high interest rates and a search for yield, technology stocks linked to AI appear as a safe haven capable of generating sustained long-term growth.
Sovereign wealth funds, asset managers, and pension funds participated massively in these IPOs, confirming their preference for AI at the expense of crypto. This movement is all the more striking because it comes after years of talk about the imminent arrival of institutional money in cryptocurrency. That money has indeed arrived, but it has taken the path of AI rather than that of Bitcoin.
AI vs Crypto: an asymmetric competition
The competition between artificial intelligence and cryptocurrency for institutional capital is asymmetric in more than one way. AI benefits from broader understanding among traditional investors, a clearer regulatory framework, and a compelling narrative focused on productivity and business transformation. Crypto, on the other hand, remains...
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