Bitcoin is failing as both a safe haven and a tech trade

BTC’s digital-gold moment never arrived. BTC briefly fell below USD 60k this week for the first time since October 2024, extending a selloff that has now erased more than half its value from the USD 126k peak reached last year, CNBC and Bloomberg report. ETH sank to its lowest level since last April, while other major tokens including XRP, SOL, and Dogecoin also fell sharply, Bloomberg separately reports.

The awkward part: This should have been BTC’s moment. Geopolitical tensions remain elevated, inflation concerns are resurfacing, and investors are once again debating whether interest rates will stay higher for longer. Yet gold has attracted more defensive flows while BTC has struggled, prompting investors to question both its “digital gold” credentials and its reputation as a high-beta tech trade.

What’s driving the rout? A record streak of ETF outflows, concerns about future demand after Strategy (the world’s largest BTC treasury company) disclosed a rare BTC sale, and a growing sense that crypto is losing its place at the center of the speculative universe. Net assets across BTC ETFs have fallen to USD 80.4 bn from USD 107.8 bn in mid-May, according to CNBC.

Crypto’s bigger problem may be that it is no longer the market’s favorite wager. AI has largely replaced digital assets as the dominant growth trade, while investors now have an expanding menu of alternatives ranging from leveraged ETFs and prediction markets, to stablecoins and perpetual futures.

And there’s another contender waiting in the wings: SpaceX. The potentially record-breaking IPO is shaping up as one of the clearest tests yet of where speculative capital flows next, Bloomberg reports. The listing is banking on the firm’s retail following, allocating 30% of listed shares to retail investors.

The result is a growing fight for retail capital. More than 600 ETFs have launched in the US over the past six months alone, while more than 20 SpaceX-linked ETFs have already been filed ahead of the listing. The takeaway? Investors are still chasing the next big story; BTC just isn’t the only one anymore.

MARKETS THIS MORNING-

Asia-Pacific markets are starting the week in the red as the AI rally seen over the past few weeks reverses course and oil prices surge after Iran attacked Israel. South Korea’s Kospi is down 7.3%, while Japan’s Nikkei is down 4.4%. “The move looks more like a positioning and momentum unwind than ⁠a reassessment of the long-term AI story,” Lucerne Asset Management’s Marc Velan said.

THE CLOSING BELL-

The EGX30 fell 0.9% at yesterday’s close on turnover of EGP 9.2 bn (12.3% above the 90-day average). Regional investors were the sole net sellers. The index is up 24.7% YTD.

In the green: Qalaa Holdings (+6.3%), Raya Holding (+2.3%), and Ibnsina Pharma (+1.4%).

In the red: Fawry (-4.0%), Orascom Investment Holding (-3.6%), and E-finance (-2.9%).