Jurrien Timmer of Fidelity suggests the AI trade may have run its course, and the bull market we've seen would need to accomplish a great deal more to sustain its bullish momentum. The trend could still continue, though the stock market would have to bear more of the load on its own.
The AI "bubble" seems to be nearing its natural end: the massive funding poured into AI companies such as OpenAI and Anthropic cannot go on indefinitely, and as Anthropic moves closer to an IPO, some existing investors may finally cash in. Anthropic announced the start of its IPO roadshow on November 10, with current shareholders offering part of their stakes alongside newly issued shares.
The equal-weighted S&P 500 chart points to a comparatively healthier market backdrop, but as Timmer has noted, in a "top-heavy market it may not be enough" to keep lifting the index.
What about Bitcoin?
Crypto, by contrast, could benefit from a transitional phase in the market, though this is far from guaranteed, since both risk appetite and available capital appear to be drying up.
The main obstacles standing between Bitcoin and money rotating out of AI are, as always, volatility and the perceived safety of the crypto market. The digital asset industry is no longer what it was in the pre-AI era. New risks have emerged, including cybersecurity, concerns about Bitcoin's resistance to quantum computing, and a range of other factors that could deter fresh investment.
Bitcoin would likely be the main asset to benefit if a transition does take place.
Confirmation of a market recovery would only come once specific signs of a bull run appear in Bitcoin and larger-cap altcoins, such as higher highs and sustained inflows into institutional products like ETFs. Until those conditions align, a rapid shift of funds from the end of the AI trade into crypto appears very unlikely.
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