Bitwise: Cryptocurrencies Become a Contrarian Bet Amid AI Stock Rally

According to Bitwise Chief Investment Officer Matt Hougan, the crypto market is currently becoming a "contrarian bet" as institutional investors shift their focus to artificial intelligence (AI) stocks. In his market analysis, Hougan described the current situation as "brutal," noting that cryptocurrencies have lost appeal for investors at a time when the Nasdaq-100 index has risen by 43% this year. Cointelegraph.com reports .

Following the launch of ChatGPT by OpenAI, shares of companies related to AI technologies have surged. In particular, NVIDIA, a manufacturer of computing components essential for AI, has seen its stock rise by nearly 1,500% since then. According to Hougan, while momentum-based investments ride a wave of hype, contrarian bets require patience and long-term fundamental analysis.

Nick Ruck, Director at LVRG Research, echoed this view, stating that while AI dominates institutional portfolios, the crypto market is maturing and emerging as a sector with high return potential. According to Hougan, this bear market differs from previous ones because capital is flowing not only into Bitcoin but also into smaller assets with strong fundamentals, such as Hyperliquid, Zcash, and Stellar.

When the crypto market ceases to be driven by momentum trading, fundamentals begin to play a crucial role. Hougan views this as a sign that we are closer to the end of the bear market rather than its beginning. Nevertheless, market capitalization has continued to decline in recent days, falling to $2.38 trillion, which is 46% below the October peak.