The first half of the year was defined by the AI trade. The second half may be defined by a tougher question: Which companies and assets actually stand to benefit from it?
The contrast between crypto and equities has been one of this year's defining market stories. AI enthusiasm propelled technology stocks to record highs, while bitcoin BTC$59,642.58 has tumbled 46% to $58,300 on Tuesday.
Market analysts say investors are entering a period where AI, monetary policy and changing market structure could drive sharp swings across equities and cryptocurrencies, even as the broader economy remains resilient.
Former Credit Suisse global head of portfolio and Risk Dimensions CIO Mark Connors argued AI is no longer lifting the technology sector indiscriminately. Instead, it is separating companies building AI infrastructure from businesses whose products or services could be disrupted by large language models and AI agents.
"The market is being cleaved in two," he said in an interview with CoinDesk, pointing to Accenture's recent selloff as evidence that investors are reassessing consulting firms as generative AI automates more knowledge work. He also cited weakness in software companies, including Autodesk and Intuit, saying it suggests pressure on traditional software firms could continue.
At the same time, he expects macroeconomic uncertainty to remain the dominant force across financial markets. Correlations among stocks, bonds, commodities and cryptocurrencies have risen in recent months, according to Kestrel data, suggesting investors are responding more to policy developments than to company-specific fundamentals.
"The rest of the year is going to be messy," he said, arguing uncertainty around Federal Reserve policy and Treasury financing could keep markets volatile before financial conditions eventually improve.
Chris Sullivan, co-founder and portfolio manager at digital asset hedge fund Hyperion Decimus, sees a similar backdrop of elevated uncertainty but believes investors are paying too much attention to market narratives and not enough to market mechanics.
He argued that structural changes following the launch of U.S. spot bitcoin exchange-traded funds (ETFs), combined with institutional hedging activity in derivatives markets, have changed how bitcoin trades and weakened many of its historical relationships with broader macro indicators.
Bitcoin’s recent downturn has also challenged the idea that bitcoin had outgrown its traditional four-year cycle. Following the launch of U.S. spot bitcoin ETFs, some market participants argued institutional capital would smooth out bitcoin's volatility and bring an end to its familiar boom-and-bust pattern. Sullivan disagrees, saying the current decline still fits within historical market cycles and that he is waiting for a final bottoming pattern before declaring the bear market over.
"We are nearing the point of where it's so bearish it's bullish" from a risk-reward perspective, he said. Sullivan continues to expect bitcoin to establish a bear-market bottom in the $54,000 to $58,000 range, arguing that improving on-chain fundamentals and historically depressed investor sentiment could provide an attractive setup for long-term investors once the current period of uncertainty passes.
Zcash’s Tachyon upgrade aims to scale shielded payments, improve quantum readiness, and test whether its funding, security, and governance can hold.
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