The crypto market tumbled to begin the week as heightened macro concerns triggered more than $500 million in forced selling of long positions.

The price of bitcoin was last lower by 2% at $115,255.70, after touching a new all-time high last week – its fourth one this year – at $124,496. At one point, it fell as low as $114,706. Ether slid 4% to $4,283.15 after coming within spitting distance of its roughly $4,800 record last week. Both coins rolled over after higher-than-expected July wholesale inflation data raised questions over a Federal Reserve rate cut in September.

Investors’ profit-taking triggered a wave of liquidations across the crypto market.

In the past 24 hours, sales from 131,455 traders totaled $552.58 million, according to Coin Metrics. That figure includes about $123 million in long bitcoin liquidations and $178 million in long ether liquidations. This happens when traders are forced to sell their assets at market price to settle their debts, pushing prices lower.

Adding to investor disappointment were comments from Treasury Secretary Scott Bessent, who clarified Thursday that the strategic bitcoin reserve President Donald Trump established back in March will be confined to bitcoin forfeited to the federal government, as it explores “budget-neutral pathways to acquire more bitcoin.”

The top cryptocurrencies by market cap fell with the blue-chip coins, with the CoinDesk 20 index, a measure of the broader crypto market, down 3.7%. Crypto related stocks were under pressure premarket, led by ether treasury stocks. Bitmine Immersion was down 6% and SharpLink Gaming fell 3%. Crypto exchange Bullish, which made its public trading debut last week, was also lower by 3%.

This week, investors are keeping an eye on the Fed’s annual economic symposium in Jackson Hole, Wyoming for clues around what could happen at the central bank’s remaining policy meetings this year. Crypto traders also will be watching Thursday’s jobless claims data.

Last week’s test of bitcoin and ether highs surprised traders who expected an August pullback for cryptocurrencies, expecting macro concerns to steal focus from recent momentum around crypto’s institutional and corporate adoption – especially in what has historically proven a weak trading month for many markets – until the September Fed meeting.

Many see pullbacks this month as healthy and strategic cooldowns rather than reactions to crisis, thanks largely to support from crypto ETFs as well as companies focused on aggressively accumulating bitcoin and ether. Although ETFs tracking the price of bitcoin and ether posted net outflows on Friday, they logged net inflows of $547 million and $2.9 billion, respectively, for the week. For ETH funds it was a record week of inflows as well as their 14th consecutive week of inflows.

OpenAI CEO Sam Altman thinks the artificial intelligence market is in a bubble, according to a report from The Verge published Friday. 

“When bubbles happen, smart people get overexcited about a kernel of truth,” Altman told a small group of reporters last week.

“Are we in a phase where investors as a whole are overexcited about AI? My opinion is yes. Is AI the most important thing to happen in a very long time? My opinion is also yes,” he was quoted as saying. 

Altman appeared to compare this dynamic to the infamous dot-com bubble, a stock market crash centered on internet-based companies that led to massive investor enthusiasm during the late 1990s. Between March 2000 and October 2002, the Nasdaq lost nearly 80% of its value after many of these companies failed to generate revenue or profits. 

His comments add to growing concern among experts and analysts that investment in AI is moving too fast. Alibaba co-founder Joe Tsai, Bridgewater Associates’ Ray Dalio and Apollo Global Management chief economist Torsten Slok have all raised similar warnings.

Last month, Slok stated in a report that he believed the AI bubble of today was, in fact, bigger than the internet bubble, with the top 10 companies in the S&P 500 more overvalued than they were in the 1990s. 

In an email to CNBC on Monday, Ray Wang, CEO of Silicon Valley-based Constellation Research, told CNBC that he thought Altman’s comments carry some validity, but that the risks are company-dependent. 

“From the perspective of broader investment in AI and semiconductors… I don’t see it as a bubble. The fundamentals across the supply chain remain strong, and the long-term trajectory of the AI trend supports continued investment,” he said. 

However, he added that there is an increasing amount of speculative capital chasing companies with weaker fundamentals and only perceived potential, which could create pockets of overvaluation. 

Many Fears of an AI bubble had hit a fever pitch at the start of this year when Chinese start-up DeepSeek released a competitive reasoning model. The company claimed one version of its advanced large language models had been trained for under $6 million, a fraction of the billions being spent by U.S. AI market leaders like OpenAI, though these claims were also been met with some skepticism.

Earlier this month, Altman told CNBC that OpenAI’s annual recurring revenue is on track to pass $20 billion this year, but that despite that, it remains unprofitable. 

The release of OpenAI’s latest GPT-5 AI model earlier this month had also been rocky, with some critics complaining that it had a less intuitive feel. This resulted in the company restoring access to legacy GPT-4 models for paying customers.

Following the release of the model, Altman has also signaled more caution about some of the AI industry’s more bullish predictions.

Speaking to CNBC, he said that he thought the term artificial general intelligence, or “AGI,” is losing relevance, when asked whether the GPT-5 model moves the world any closer to achieving AGI. 

AGI refers to the concept of a form of artificial intelligence that can perform any intellectual task that a human can — something that OpenAI has been working towards for years and that Altman previously said could be achieved in the “reasonably close-ish future.“

Regardless, faith in OpenAI from investors has remained strong this year. CNBC confirmed Friday that the company was preparing to sell around $6 billion in stock as part of a secondary sale that would value it at roughly $500 billion. 

In March, it had announced a $40 billion funding round at a $300 billion valuation, by far the largest amount ever raised by a private tech company. 

In The Verge article on Friday, the OpenAI CEO also discussed OpenAI’s expansion into consumer hardware, brain-computer interfaces and social media. 

Altman also said that he expects OpenAI to spend trillions of dollars on its data center buildout in the “not very distant future,”  and signaled that the company would be interested in buying Chrome if the U.S. government were to force Google to sell it. 

Asked if he would be CEO of OpenAI in a few years, he was quoted as saying, “I mean, maybe an AI is in three years. That’s a long time.”

Six Senate Democrats on Friday released an open letter asking President Donald Trump to reconsider his decision to allow tech giants Nvidia and Advanced Micro Devices to sell AI semiconductor chips to China in exchange for 15% of revenue from the sales.

The letter — signed by Senators Chuck Schumer, D-N.Y.; Mark Warner, D-Va.; Jack Reed, D-R.I.; Jeanne Shaheen, D-N.H.; Christopher Coons, D-Del.; and Elizabeth Warren, D-Mass. — was in response to an Aug. 11 announcement by Trump that Nvidia and AMD would pay the U.S. government a 15% cut of revenue from chip sales to China in exchange for export licenses.

“Our national security and military readiness relies upon American innovators inventing and producing the best technology in the world, and in maintaining that qualitative advantage in sensitive domains. The United States has historically been successful in maintaining and building that advantage because of, in part, our ability to deny adversaries access to those technologies,” the letter states.

“The willingness displayed in this arrangement to ‘negotiate’ away America’s competitive edge that is key to our national security in exchange for what is, in effect, a commission on a sale of AI-enabling technology to our main global competitor, is cause for serious alarm,” the letter continues.

Senators also warned that selling advanced AI chips — specifically Nvidia’s H20 and AMD’s MI308 chips — to China could help strengthen its military systems, a claim that Nvidia denies.

In a statement to CNBC, a Nvidia spokesperson said: “The H20 would not enhance anyone’s military capabilities, but would have helped America attract the support of developers worldwide and win the AI race. Banning the H20 cost American taxpayers billions of dollars, without any benefit.”

The letter from Senate Democrats also requests a detailed response from the administration by Friday, Aug. 22, regarding the current deal involving Nvidia and AMD, as well as any similar arrangements being made with other companies.

“We again urge your administration to quickly reverse course and abandon this reckless plan to trade away U.S. technology leadership,” the letter states.

A request for comment from the White House and AMD was not immediately returned.

Despite Trump allowing chip sales to resume, it has already become clear that China isn’t welcoming Nvidia back with open arms, instead urging tech companies to avoid buying U.S. companies’ chips, according to a Bloomberg report.

“We’re hearing that this is a hard mandate, and that [authorities are actually] stopping additional orders of H20s for some companies,” Qingyuan Lin, a senior analyst covering China semiconductors at Bernstein, told CNBC.

In a separate report, The Information said regulators in China have ordered major tech companies, including ByteDance, Alibaba, and Tencent, to suspend Nvidia chip purchases until a national security review is complete.

— CNBC’s Kristina Partsinevelos contributed to this report