Bitcoin is struggling to attract fresh capital as momentum-driven traders shift their attention toward artificial intelligence stocks and anticipated IPOs.
Jim Ferraioli, Director of Digital Currencies Research and Strategy at Charles Schwab, says the cryptocurrency’s recent underperformance has little to do with fading institutional demand.
Instead, Ferraioli argues that bitcoin has simply lost its standing as the market’s most compelling speculative opportunity, a role it once dominated.
“Crypto investors historically just go wherever the momentum is,” Ferraioli said. “And momentum is out of crypto at the moment.”
Capital that previously chased speculative gains in digital assets is now flowing toward gold, AI-related equities, and companies expected to go public in coming months.
The AI boom has created an entirely new class of speculative opportunities that did not exist during previous crypto market cycles, drawing attention away from bitcoin.
Public companies tied to AI infrastructure, data centers, and advanced computing have generated strong returns, giving traders an attractive alternative to digital assets.
Ferraioli specifically highlighted anticipated IPOs as a growing focal point for investors who might otherwise have allocated capital to bitcoin or other cryptocurrencies.
“I think people that are excited about momentum are getting excited about IPOs,” he said. “Then some of these you can actually access the private shares on these decentralized exchanges on Hyperliquid.”
That trend is particularly notable because crypto-native platforms like Hyperliquid (HYPE) now allow traders to speculate on private companies and non-crypto assets through perpetual contracts.
This means capital is leaving traditional crypto markets without necessarily leaving crypto-native infrastructure, complicating the picture for bitcoin’s near-term price outlook.
Despite growing institutional adoption, expanded ETF access, and regulatory progress, Ferraioli maintains that bitcoin remains primarily a retail, momentum-driven asset.
“Again, this is primarily a retail asset,” he said, noting that retail investors tend to chase trends rather than build positions based on long-term valuation frameworks.
Seasonal factors are also weighing on prices, with summer historically representing one of bitcoin’s weakest periods for trading activity and investor engagement.
“People know that for bitcoin seasonally, summer is the weakest time,” Ferraioli said, adding that breakeven sellers are further suppressing any attempt at a meaningful recovery.
Ferraioli also cautions that institutional adoption, while real, remains smaller than many market participants commonly assume, limiting its ability to offset retail outflows.
None of the positive structural developments surrounding bitcoin can guarantee higher prices if investor attention remains focused on competing narratives elsewhere.
“There’s a lack of a reason to be buying here when there’s other things you can choose,” Ferraioli said, summing up the core challenge facing bitcoin this summer.
