Crypto Stocks Suffer as Investors Send AI Soaring

“I felt a bit like a cave man who found fire,” Switzerland-based investor Daniel Koss said of his shift from investing in cryptocurrency to putting his money into artificial intelligence (AI), The Wall Street Journal reported Monday (Aug. 10).

According to that report, Koss made the same pivot as a lot of investors and hedge funds, unloading their bitcoin and other crypto tokens to invest in AI.

The WSJ says this helps illustrate why bitcoin has been halted at around $60,000 after falling from its record of more than $126,000 in October. At the same time, chipmakers and other AI stocks have seen the types of surges once found in the crypto market.

“What’s happening in crypto is the purge is just getting started,” Mike McGlone, senior commodity strategist at Bloomberg Intelligence, told the WSJ.

Meanwhile, Ryan Ho, founder of social-trading app Legend, said he began pulling away from crypto based on his view that the market no longer functioned like a healthy risk asset following last year’s crash.

He said the potential for AI’s growth was more attractive to everyday investors because it was grounded in real-world uses, like ChatGPT or AI-assisted coding. Also fueling the shift is the fact that trading platforms like Hyperliquid began embracing AI derivatives, the report added.