Crypto is turning into a "contrarian bet" as institutional investors flock to artificial intelligence stocks, according to Bitwise chief investment officer Matt Hougan. In a market note Tuesday, Hougan said the crypto market is brutal right now because it's no longer the center of attention. AI stocks, robotics companies, and SpaceX have drawn capital away, leaving crypto to undergo a painful shift from momentum trade to contrarian bet.
Shares in Nvidia, a key AI chipmaker, have surged nearly 1,500% since OpenAI launched ChatGPT in late 2022. Hougan argues that contrarian bets can be strong investments, but they require patience and a focus on fundamentals rather than hype. He noted that unlike past cycles where Bitcoin was the safe haven, money is now rotating into smaller assets with solid fundamentals like Hyperliquid, Zcash, and Stellar.
The broader crypto market remains under pressure, with total capitalization dropping 5.3% on the day to $2.38 trillion, 46% below its October peak.
