Crypto: Crypto Loses Speculative Edge As AI And Robotics Attract Capital:...
Speculative capital is flowing into emerging tech opportunities, as progress with US crypto regulations continues to stall, limiting investor appetite for digital assets, Delphi Digital said.
Speculative capital is increasingly flowing out of cryptocurrency markets and into other emerging technologies including artificial intelligence and robotics, according to research company Delphi Digital.
Last year’s underperformance of most altcoin sectors shows that crypto is no longer the “default destination” for speculative capital seeking higher-risk opportunities, wrote Delphi Digital in a Wednesday X post.
The trend illustrates that emerging tech opportunities may continue limiting investment into the wider cryptocurrency space, specifically from risk-hungry investors looking for the sectors with the highest risk-to-return profiles.
Market data supports the trend. While Bitcoin (BTC) has declined about 12% over the past year, the Global X Robotics and Artificial Intelligence ETF has gained roughly 13% over the same period, according to TradingView. Altcoins outside the top 10 tokens have fallen more sharply, down more than 30%.
Related: Web3 revenue shifts from blockchains to wallets and DeFi apps
While crypto investor capital is rotating into AI applications, the underperformance of the sector can also be attributed to uncertainty regarding monetary policy and cryptocurrency regulations, according to Aurelie Barthere, principal research analyst at crypto intelligence platform Nansen.
“Another key factor is the repricing of Fed rate cuts, with markets now pricing an elevated terminal rate of around 3.8% over the next five years, which tightens liquidity conditions for risk assets,” Barthere told Cointelegraph.
“At the same time, political gridlock around the CLARITY bill has weighed on sentiment, adding an additional crypto-specific headwind alongside broader macro pressures,” Barthere added.
The crypto market structure bill suffered another setback this week after the US Senate Agriculture Committee delayed a scheduled markup for its version of the bill to Thursday from Tuesday after the US was hit by a severe winter storm, Cointelegraph reported on Monday.
Source: CoinTelegraph
