Bitcoin has lost the “momentum trade,” not because crypto’s fundamentals are broken, but because investors are chasing bigger, flashier opportunities elsewhere — that’s the take from Charles Schwab’s Jim Ferraioli.
A quick snapshot: Bitcoin is down more than 16% over the past month while the S&P 500 has climbed roughly 5%. Ferraioli, director of digital currencies research and strategy at Charles Schwab, argues this gap stems less from crypto-specific negatives and more from a shift in where speculative capital is heading.
“Bitcoin has been in a bear market since October,” Ferraioli told crypto media. He doesn’t deny the industry’s progress — spot ETF approvals, billions in institutional inflows, and clearer regulatory signals in Washington — but notes these bullish developments haven’t translated into the kind of sustained price momentum that attracts waves of speculative buying.
Why momentum matters
Ferraioli’s central point: crypto markets historically benefit when digital assets are the most attractive speculative play. Once another theme outperforms, capital migrates away. Over recent months that theme has been artificial intelligence — and tech tied to AI infrastructure, advanced computing and data centers has delivered strong returns. Anticipated mega-IPOs (OpenAI, Anthropic) and private-market excitement (SpaceX reportedly eyeing an IPO valuation as high as $1.8 trillion) are also diverting attention and capital.
The private market angle is important. Platforms like Hyperliquid now offer synthetic exposure to private companies and other non-crypto assets, creating new outlets for speculative money that might once have flowed into Bitcoin and other tokens. “I think people that are excited about momentum are getting excited about IPOs,” Ferraioli said, noting traders can access private shares through decentralized exchanges.
What’s not driving the selloff
Ferraioli downplays the idea that MicroStrategy’s recent sale of 32 BTC — a high-profile transaction given executive chairman Michael Saylor’s reputation as a Bitcoin stalwart — is the main culprit. He calls that explanation convenient but misplaced: the downtrend was already under way.
Instead, investor positioning and profit-taking appear more relevant. Some holders who experienced major swings over the past year may be using recent recoveries as an exit point. Supporting evidence:
- On May 26, BlackRock’s IBIT spot Bitcoin ETF reported a $1.26 billion off-exchange block transaction; NYDIG characterized it as a large investor rapidly reducing exposure.
- U.S. spot Bitcoin ETFs posted $483 million in net outflows on June 2, extending an 11-session withdrawal streak that removed more than $3.4 billion from these products.
- Binance Research flagged a “capital black hole,” with money funneling into AI, semiconductor, defense and energy stocks and leaving less available for Bitcoin and other risk assets.
Institutional picture and seasonality
Ferraioli says institutional participation is growing but remains smaller than many assume: “Again, this is primarily a retail asset.” That helps explain why regulatory progress — including potential moves like the Clarity Act — hasn’t immediately lifted prices. If investors see better returns elsewhere, policy wins alone won’t spark a renewed rally.
He also warns of summer seasonality: trading activity historically slows in summer, which has often coincided with weaker Bitcoin performance.
Bottom line
Long-term trends — regulation, institutional adoption, and new product launches — are constructive for crypto. But in the near term, Bitcoin’s price is being dictated by where speculative capital can deliver faster, bigger gains. “There’s a lack of a reason to be buying here when there’s other things you can choose,” Ferraioli said. Until momentum returns to crypto, capital will likely keep flowing to the narratives and instruments that outshine it.
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