After AI-driven strength lifted equities while Bitcoin underperformed, market participants now expect macro policy and evolving market structure to take over as the main drivers.
The first half of the year was dominated by the AI narrative. The second half may be shaped by a more challenging question: which companies and assets are actually positioned to benefit from that trend.
The gap between crypto and equities has become one of the defining market stories of the year. AI optimism pushed technology stocks to record highs, while Bitcoin (BTC) fell roughly 46%, trading near $58,300 on Tuesday.
Analysts say the next phase could be marked by sharper swings across both asset classes as AI developments, monetary policy, and shifting market mechanics interact, even as the broader economy holds up relatively well.
Former Credit Suisse global head of portfolio strategy and Kestrel CIO Mark Connors said AI is no longer lifting all tech stocks evenly. Instead, it is dividing the market between companies building AI infrastructure and those more exposed to disruption from large language models and AI agents.
He said “the market is being split in two,” pointing to recent weakness in firms like Accenture as evidence that investors are reassessing consulting groups as AI automates more knowledge work. He also highlighted pressure in software names such as Autodesk and Intuit, suggesting the trend could continue for traditional software firms.
At the same time, he expects macro uncertainty to remain the dominant force in markets. Rising correlations across stocks, bonds, commodities, and crypto indicate investors are increasingly trading around policy signals rather than fundamentals.
He warned that “the rest of the year is going to be messy,” citing uncertainty around Federal Reserve policy and U.S. Treasury financing as factors likely to keep volatility elevated before conditions eventually stabilize.
Hyperion Decimus co-founder and portfolio manager Chris Sullivan offered a similar view on uncertainty but argued that investors are overemphasizing narratives while underestimating market structure.
He said the introduction of U.S. spot Bitcoin ETFs, along with institutional hedging in derivatives markets, has changed Bitcoin’s behavior and weakened its traditional links to macro indicators.
Bitcoin’s recent decline has also revived debate over whether its four-year cycle remains intact. While some expected ETFs to reduce volatility and smooth out boom-and-bust patterns, Sullivan said the current downturn still fits within historical cycle behavior.
He added that he is waiting for a clearer bottom formation before calling the bear phase over, noting that sentiment is approaching levels where “it’s so bearish it’s bullish” from a risk-reward perspective.
Sullivan expects Bitcoin to bottom in the $54,000–$58,000 range, pointing to improving on-chain signals and extremely weak sentiment as potential foundations for a longer-term recovery once current uncertainty fades.
