Crypto has lagged equities due to capital rotation into the AI trade—NVDA, MSFT, and mega-cap tech absorbed institutional flows that would have otherwise entered digital assets.

The AI sector is now showing classic bubble characteristics: unsustainable valuations, crowded positioning, and deteriorating risk/reward. When this trade unwinds—either through multiple compression or earnings disappointment—expect capital reallocation.

Crypto remains a volatility play with asymmetric upside once risk appetite rotates back. The next liquidity cycle will likely trigger renewed inflows as investors hunt for the next high-beta opportunity.

Timing is uncertain, but the setup is building. Watch for cracks in AI momentum and shifts in macro liquidity conditions.