That is the problem K33 identified for Bitcoin. The firm argued that even with the cryptocurrency looking undervalued, the opportunity cost of holding it had become difficult to ignore while AI-related assets were surging. Bernstein similarly pointed to retail investors shifting money toward AI.
Bank of America’s July fund manager survey found 82% calling long semiconductors the market’s most crowded trade, while 45% simultaneously named an AI bubble as the biggest tail risk, according to Reuters.
Yet prediction-market traders aren’t expecting an imminent reckoning: Polymarket gives a 16% chance of the AI bubble bursting this year.
Crypto Traders Are Following the Money
The Wall Street Journal reported Monday that individual traders and hedge funds have dumped Bitcoin and other tokens to buy AI stocks. One trader reportedly sold a six-figure Bitcoin stake to go all-in on AI, while another rotated from Bitcoin and altcoins into chipmakers.
Crypto-native venues like Hyperliquid, as measured by Hyperliquid Strategies Inc. (NASDAQ:PURR), now offer stock-linked perpetuals tied to AI names, easing the switch.
Bloomberg Intelligence strategist Mike McGlone told the WSJ that crypto’s “purge is just getting started.”
Even Bitcoin Miners Are Chasing AI
In January, Riot even sold about 1,080 Bitcoin to fund its $96 million Rockdale land purchase, where it plans to convert the full 700-megawatt site for data center tenants.
Bitcoin isn’t disappearing, but it no longer has the speculative trade to itself. AI stocks now offer investors another way to chase outsized returns without leaving public markets.
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