Anthropic’s New AI Tool Triggers Brutal Legal Tech Selloff - Here’s What It Means for Crypto’s Future
Legal tech stocks just got served—by an AI.
Anthropic's latest release didn't just enter the market; it detonated it. Overnight valuations evaporated as algorithms demonstrated they could parse contracts faster than any human team—and at a fraction of the cost. The selloff wasn't a correction; it was a realization.
The Automation Tipping Point
This isn't about replacing paralegals. It's about exposing how many 'tech' companies were just selling overpriced digital paperwork. When a single AI model can review a thousand NDAs in the time it takes to brew coffee, entire business models crumble. Investors aren't fleeing legal tech—they're fleeing inefficiency.
Why Crypto Should Pay Attention
Smart contract platforms just got their ultimate validation. If traditional legal frameworks can be disrupted this violently by AI, imagine what happens to decentralized code-based law. Ethereum, Solana, and their peers don't just automate transactions—they automate enforcement. No billable hours, no discovery delays, no ambiguous clauses.
The brutal math? One AI tool erased billions in market cap from legacy players. Meanwhile, DeFi protocols quietly processed more value than some national economies—without a single lawyer involved. The financial jab? Wall Street still thinks billable hours are an asset class.
This selloff isn't an endpoint. It's a signal flare. The real value isn't in digitizing old systems—it's in building new ones that don't need intermediaries at all. The machines aren't coming for the law; they're rewriting it.
Anthropic’s new tool triggered a brutal selloff in legal tech
The Tuesday crash wasn’t random. It started after Anthropic, an AI company, rolled out a tool made for in-house lawyers. That single launch wiped 20% off companies like LegalZoom in one trading day.
The fallout hit the software sector hard. The S&P North American Software Index fell 15% in January, the worst monthly drop since 2008. Things didn’t calm down Wednesday either. The market kept slipping.
Dave Duffield, 85, who co-founded Workday, is another one taking a hit. Workday’s stock dropped 25% this year and hit its lowest level in three years.
Dave’s net worth dropped 19%, landing him at $11.3 billion. His wealth mostly comes from the shares he holds in the company.
Over at Oracle, 81-year-old Larry Ellison lost nearly $40 billion so far in 2026. His wealth has dropped 16% since January, pulling him down to the number six spot on the global rich list. He now sits at $207.5 billion, which sounds like a lot until you realize how fast it dropped.
Armstrong leads crypto losses as private equity steps back
It wasn’t just software getting crushed. The crypto world took a beating too. Brian Armstrong, CEO of Coinbase, saw his wealth drop 18% this year.
But since October 31, he’s actually down 44%, which makes his loss the steepest of any billionaire in the country over the last three months. The price of bitcoin also dropped about 40% since October. It hit its lowest level since Donald Trump won the 2024 election.
Private equity isn’t doing much better. Orlando Bravo, 56, from Thoma Bravo, lost 12% of his wealth this year. He’s now sitting on $13.1 billion. Investors are pulling back from software bets and it’s showing.
Some billionaires had just hit new highs. Scott Cook, founder of Intuit, was worth $4.4 billion in late 2022. By July 2025, he reached $8.5 billion and made it into the list of the 500 richest people. But that didn’t last.
On Tuesday, Intuit shares dropped 11%, the company’s worst day since March 2020. Scott is now worth $6.5 billion, down 17% for the year, and he’s no longer on that global rich list.
The smartest crypto minds already read our newsletter. Want in? Join them.
