The ongoing upheaval in business models driven by advancements in artificial intelligence took a significant toll on the stock market and cryptocurrency prices on Monday. IBM found itself particularly affected after Anthropic announced that its Claude Code technology could streamline the automation of COBOL modernization.
COBOL, or Common Business-Oriented Language, is a programming language that remains integral to many financial and governmental systems. According to Anthropic, an estimated 95% of ATM transactions in the U.S. are processed using COBOL. The language powers hundreds of billions of lines of code currently running in production, which underscores its importance across various critical infrastructure sectors.
Anthropic highlighted a pressing issue: many of the original developers of these COBOL systems have retired, taking with them invaluable institutional knowledge. As fewer universities teach COBOL, the challenge of finding engineers capable of working with the language is becoming increasingly difficult. In the past, modernizing a legacy COBOL system required extensive resources, typically involving numerous consultants over several years to map existing workflows. However, advancements like Claude Code are set to automate the exploration and analysis phases, potentially reducing the effort and financial resources traditionally necessary for such projects.
The impact on IBM was notable, with the company’s stock dropping by 11.2% shortly before the market close, reflecting investor concerns over evolving competition in the software sector. This decline, alongside routine AI-related downturns in the software and private equity sectors, contributed to significant losses for major stock indices, with the Dow, S&P 500, and Nasdaq all falling by more than 1%.
In a recent analysis, The Kobeissi Letter emphasized the inherently pivotal nature of these times for the technology and finance sectors, suggesting that the shifts caused by AI advancements are profound.
The interconnectedness of the tech sector and cryptocurrency was evident, with cryptocurrencies facing substantial pressure as well. Bitcoin saw a 5% decrease in value over 24 hours, settling at around $64,000. Other cryptocurrencies like ether (ETH) and solana (SOL) also experienced losses in a similar range, while stocks associated with companies in the crypto space, such as Coinbase, MicroStrategy, Circle, and Galaxy Digital, were down between 4% and 7%.
Interestingly, the only stocks that managed to post gains were those of bitcoin miners that have pivoted to AI-driven business models. Companies like Iren (IREN) rose by 5%, Cipher Mining (CIFR) gained 3.4%, CleanSpark (CLSK) was up 1.5%, and Hut 8 (HUT) increased by 0.7%.
In contrast, precious metals showed resilience, with gold prices climbing 3.2% to $5,243 per ounce and silver rising by 6.5% to $87.69. This shift emphasizes a broader market reaction as investors seek safety amid volatility in technology and cryptocurrency markets.
