Bitcoin's 7% October Drop: AI and Bonds Break Uptober Streak

During October, Bitcoin (BTC) declined by roughly 7%, ending the typical Uptober seasonal upswing. The pullback came as the artificial intelligence (AI) sector weakened.

Treasury yields dropped as oil futures climbed, severing an 80% correlation that had held this year. Around the same time, Bitcoin fell roughly 4% late Thursday, just ahead of Friday's Nasdaq selloff and in step with the significant Binance hack.

What Ended the Oil-Bond Correlation?

The break is traced to AI stocks by Jeffrey Rosenberg, a senior portfolio manager at BlackRock. The Magnificent Seven—the biggest AI-linked US companies—pulled back over October.

“In the market’s mind, the geopolitical risk is secondary to AI risk.”

Rosenberg made the remark in an appearance on CNBC.

In his view, markets saw AI weakness as a caution for US growth. That kept yields lower even as oil climbed.

Rosenberg describes third-quarter gross domestic product (GDP) as strong and tied to AI. Business investment advanced 12.7%, the largest rise outside the pandemic since 2011.

Fed Chair Kevin Warsh expressed a different view on Wednesday. He argued capital spending is widening beyond tight areas.

Warsh also cited rising oil as an element in the central bank's inflation battle. By mid-October, rate futures were pointing to a December increase, as Fed hike expectations built.

Google, meantime, recorded its biggest one-day decline on record last week, removing about $500 billion in value.

Is the Uptober Trend Still Relevant in an AI-Driven Market?

Data shows that Bitcoin advanced in 10 of 13 Octobers through 2025, with a median gain of about 15%.

October 2025 also closed lower, making the 2026 drop the second negative October in a row.

Microsoft, by contrast, re-entered the public bond market after nearly ten years. Credit default swap spreads, which price default insurance, are around 55 for Microsoft. Oracle's are closer to 300.

Rosenberg says the bond market can handle an expected $4 trillion in AI debt over four years. The trade-off, he says, would be lower prices and wider spreads. If that supply lands, the AI buildout would sit at the center of bond pricing, extending beyond equity sentiment.