Cryptobusiness: Has the rotation of AI funds into cryptocurrency begun?

The cryptocurrency market came back to life this week, as institutional investors pushed a net inflow of funds into the U.S. spot Bitcoin ETF for six consecutive days, setting the longest record since April, while crypto-related stocks rose due to optimistic U.S. regulatory prospects. But a more fascinating story may be unfolding beyond encryption: AI's grip on speculative capital is beginning to loosen.

After dominating the market for nearly two years, artificial intelligence trading is becoming more selective, as investors are beginning to distinguish between companies with sustainable profitability and companies that rely on hype cycles to advance. The Philadelphia Semiconductor Index (SOX) recently fell 20% from a high, falling into a technical bear market, but it is still well above its level in the same period last year.

Some analysts believe this shift may mark the beginning of a broader return of funds to digital assets. Although it is too early to assert long-term trends, increased regulatory clarity, recovery in ETF demand and cooling of the artificial intelligence craze are creating the most favorable macro environment for cryptocurrencies in months.

Bitcoin ETF has net inflows for six consecutive days, market sentiment improves

The U.S. spot Bitcoin ETF has extended its net inflows record to six consecutive trading days, attracting US$203.1 million in new capital, showing initial signs of recovery in institutional demand. The latest round of inflows brought the total size of the six days to approximately US$930 million, setting the longest consecutive net inflow record since April. Bitcoin briefly exceeded US$67,000. The recovery in demand was accompanied by improved market sentiment, and the cryptocurrency fear and greed index rebounded from "extreme fear" to the "fear" range.

Since its launch in January 2024, the U.S. spot Bitcoin ETF has attracted a cumulative net inflow of US$51.8 billion, and currently has net assets of US$80.9 billion, but year-to-date net flow still has a loss of US$4.84 billion. Analysts said Bitcoin needs to remain above the US$65,000 to US$65,500 range to strengthen the logic of continued bullish breakthroughs.

Cryptocurrency gains accelerate, AI trading shows signs of cooling down

The rise in Bitcoin and the broader digital asset market coincides with progress in U.S. crypto legislation and the cooling of artificial intelligence transactions, triggering market expectations that funds may flow back into the crypto sector. The crypto market overall rose, with crypto-related stocks such as Coinbase, American Bitcoin and Cipher Digital all recording double-digit percentage gains. U.S. Treasury Secretary Scott Bessant said lawmakers had stood on the "1-yard line" of the Clarification Act, which would establish a regulatory framework for digital assets, boosting market sentiment.

Analysts also pointed to the weakening momentum of artificial intelligence stocks as another potential catalyst. Stephen Ulett, CEO of FRNT Financial, said slowing enthusiasm for artificial intelligence stocks and growing confidence in the interest rate outlook may support Bitcoin's breakthrough. The SOX index, a benchmark for artificial intelligence chip makers, has recently fallen by more than 20% from its recent highs due to overvaluation and concerns about artificial intelligence infrastructure spending.

AI infrastructure transactions drive bitcoin mining stocks surge

Shares of Bitcoin miners surged collectively as Hut8 and IREN announced a multibillion-dollar artificial intelligence infrastructure deal that strengthened the industry's profitable prospects for transitioning into data centers and cloud computing, while the digital asset market itself remained struggling. Hut8 announced a 15-year, US$9.8 billion lease agreement for its artificial intelligence data center campus, while IREN disclosed a US$2.8 billion cloud services contract with artificial intelligence developers. Driven by the news, shares of Hut8, IREN, Cipher Digital, CleanSpark and MARA Holdings all rose. These transactions show that as the economics of mining becomes increasingly severe, mining companies are actively diversifying their businesses and are no longer limited to Bitcoin production. IREN expects that by the end of 2026, annual recurring revenue from its artificial intelligence cloud business will exceed US$4 billion.

Although investors have given positive feedback on mining companies 'AI transformation, analysts point out that it also raises new questions about execution and funding. Blocksbridge Consulting estimates that the industry needs about $50 billion in additional capital to realize its AI ambitions, and insider stock sell-offs have attracted more attention.

Bernstein believes tokenization and forecasting markets will drive Robinhood's next phase of growth

Bernstein raised Robinhood's target price, arguing that the brokerage's long-term growth will be driven by tokenized assets and forecast markets rather than traditional cryptocurrency trading. The investment firm raised its target price for Robinhood to $160 from $130 and maintained its "outperform" rating. Analysts predict that the market will be the company's fastest-growing business, bringing in $1.7 billion in revenue by 2028. Bernstein also sees tokenized stocks as a major growth opportunity and points to Robinhood's Arbitrum based Layer-2 network as a key infrastructure for bringing real-world assets to the chain.

This optimistic outlook comes as Wall Street is accelerating its tokenization process, and companies such as Broadridge, Alpaca, Securitize and Cantor Fitzgerald are expanding their blockchain-based securities infrastructure.

Bernstein believes that forecasting markets, perpetual contracts and tokenized stocks will become key competitive battlefields for Robinhood.