Bitcoin Faces Choppy Summer as AI Stocks Pull Capital Away from Crypto

TLDR

• Bitcoin dropped to $67,000 as investors move money into AI-related stocks
• Spot bitcoin ETFs saw their second-largest three-week outflow streak on record, shedding 62,794 BTC
• K33 Research warns that rising leverage and fading institutional demand could push bitcoin to new lows
• Bitwise CIO Matt Hougan says crypto has shifted from a momentum trade to a “contrarian bet”
• Smaller crypto assets with strong fundamentals like Hyperliquid, Zcash, and Stellar are showing relative strength

Bitcoin is sliding toward $67,000 as investor money flows out of crypto and into artificial intelligence stocks, with two research firms warning the market could face more pain ahead.

K33 Research head Vetle Lunde said bitcoin’s weakness comes down to one simple idea: investors feel the cost of holding bitcoin is too high when AI stocks keep going up.

The numbers back that up. Spot bitcoin ETFs lost 62,794 BTC over the past three weeks. That is the second-largest outflow streak on record.

The selling picked up speed after bitcoin failed to break above its 200-day moving average last month. Bitcoin has now been stuck below that level while the Nasdaq and S&P 500 keep hitting record highs.

Investors are also looking ahead to possible IPOs from companies like SpaceX and Anthropic. K33 says that pipeline may be pulling even more capital away from crypto.

Warning Signs in the Derivatives Market

The derivatives market is also sending warning signals. CME bitcoin futures open interest has dropped to its lowest level since October 2023. That points to institutional traders stepping back.

At the same time, funding rates in perpetual futures have moved higher even as bitcoin’s price falls. That means leveraged long positions are building into a weakening market, which K33 says is a red flag.

K33 previously said bitcoin’s drop to around $60,000 in February was likely the lowest point of this cycle. The firm is now less certain about that call.

Crypto Becomes a Contrarian Bet

Bitwise CIO Matt Hougan put it plainly: crypto is no longer the most exciting trade in the room.

He said crypto has moved from a momentum trade to a contrarian bet. That shift changes how investors behave. Momentum trades are driven by excitement. Contrarian bets require patience and a focus on fundamentals.

Nvidia shares have gained nearly 1,500% since ChatGPT launched in late 2022. That kind of return makes it hard for bitcoin to compete for attention.

Hougan said this cycle is different from past downturns. Instead of bitcoin acting as a safe haven, money is moving into smaller tokens with real utility, like Hyperliquid, Zcash, and Stellar.

He also argued that this shift toward fundamentals is a sign the bear market may be closer to ending than beginning.

Total crypto market cap has fallen to $2.38 trillion, down 46% from its October peak.

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