Crypto is turning into a “contrarian bet” as institutional investors are being drawn to artificial intelligence stocks, says Bitwise chief investment officer Matt Hougan.
“The crypto market is brutal right now,” Hougan wrote in a market note on Tuesday. “One major reason is that crypto is no longer the belle of the ball. AI stocks, robotics companies, SpaceX … who needs crypto when the Nasdaq-100 is up 43% year-over-year?”
“With AI sucking all the oxygen out of the room, crypto is being forced to go through a painful metamorphosis: from momentum trade to contrarian bet.”
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Stocks linked to companies involved in AI have skyrocketed as the technology has captured investor attention after OpenAI launched ChatGPT to the public in late 2022. Shares in Nvidia, which makes computing components key to AI, have gained nearly 1,500% since ChatGPT’s launch.
Hougan argued that contrarian bets can be great investments, but their payoff pattern is “usually spotty.”
“Momentum
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