Crypto Market Suffers Crushing Defeat Against AI Stocks' Profits...Retail Investors' Funds Make a Mass Exodus

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An analysis suggests that the AI investment frenzy is siphoning off funds that would otherwise flow into major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and XRP. It is diagnosed that the inflow of capital into the virtual asset market is weakening as investors choose AI-related stocks over cryptocurrencies when faced with the same dollar to invest.

Benzinga reported on May 21 (local time) that Dan Ives, an analyst at Wedbush Securities, claimed on Anthony Pompliano's podcast that the AI investment cycle is diverting capital that would otherwise go to Bitcoin. Ives explained that investors are choosing between AI-related stocks and Bitcoin when allocating cash, and currently, they are opting for AI stocks due to the potential for greater returns.

Ives described the AI investment trend as a “once-in-a-century cycle.” He believes that as AI brings immense change and disruption across the technology industry, investors' interest and funds are shifting from cryptocurrencies to AI. Benzinga noted that while Bitcoin has risen 15% in the last 90 days, it has not shown as strong a performance as expected over the past year.

However, Ives also pointed out that AI investments carry risks. He stated that if investors choose the wrong AI stock, they might feel they should have stayed with cryptocurrencies. Bitcoin has also shown unexpected trends recently. It rose instead of falling after the Iran conflict and has outperformed both gold and the S&P 500 over a three-year period, he added.

Another analysis suggested that fund flows are not fixed to a single investment theme. Ives likened the movement of investment funds to a pendulum swinging between various investment themes. He emphasized that despite many claims late last year that tech stocks were over and financial stocks would lead the market, investors should not get carried away by a specific narrative but rather determine the right choice for themselves.

Benzinga reported that cryptocurrencies are not disappearing and will remain a part of portfolios. However, the spending by companies pouring billions of dollars into data center construction, semiconductor shortages, and AI infrastructure now appears to offer clearer profit opportunities for investors. AI offers 15-20% return potential through various companies, while cryptocurrencies have a different risk-reward structure accompanied by higher volatility.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*